Step 1: Understanding the Concept:
This question tests the use of modal and semi-modal verbs. The structure of the sentence is "Subject + \_\_\_\_\_\_\_\_ + not + base verb".
Step 2: Detailed Explanation:
Let's examine the options:
- (A) is: "He is not be there" is grammatically incorrect. It should be "He is not there."
- (B) shall: "He shall not be there" is grammatically correct and expresses a strong intention or command.
- (C) need: "He need not be there". Here, 'need' acts as a modal verb (a semi-modal), meaning 'it is not necessary for him to be there'. This structure is grammatically incorrect. The modal form is `need not`, not `needs not`.
- (D) must: "He must not be there". This is grammatically correct and expresses a prohibition (he is forbidden to be there).
Step 3: Final Answer:
The correct option is (D). "He must be there" means it is not necessary for him to be there.