Lay and lie are both present-tense verbs.
$Lay$ means to put or set something down, e.g. I lay down the book.
$Lie$, on the other hand, is defined as, “to be, to stay or to assume rest in a horizontal position,
e.g. I lie down to sleep or When I pick up a copy of my favorite magazine,
In this question "the morning" is used, so, they are talking about a specific morning so this sentence is not talking about the habit.
lay is second form of lie,
Correct option is (D).
PS: Sentence in Hindi means, "vah aaj 8 baje tak bed me tha".