Can Delhi University give year back to second year students?

Yes, it is completely possible. Especially, the students who have graduated after 2017 are from the CBCS batch. Earlier, they used to let students enter in the third year even if they failed in all the previous papers. This is not the case after 2017. 

In order to avoid dropping a whole year, all you need to do is pass in 4 out of 8 papers. You have to pass with 50%. If you don’t, then you will be appearing for the exam as an ex-student and wasting a year since you need to clear those exams to earn your degree. However, getting back a maximum of 3 papers is still fine but not more than that.