Is it possible to convert a .class file to .java file?
How can this be done?
What about the correctness of the code extracted from this option?
It is possible. You need a Java Decompiler to do this.
You'll find mostly it'll do a surprisingly good job. What you'll get is a valid .java file which will compile to the .class file but this .java file won't necessarily be the same as the original source code. Things like looping constructs might come out differently, and anything that's compile time only such as generics and annotations won't be re-created.
You might have a problem if the code has been obfuscated. This is a process which alters the class files to make them hard to decompile. For example, class and variable names are changed to all be similar so you'll end up with code like aa.a(ab) instead of employee.setName(name) and it's very hard to work out what's going on.
I remember using JAD to do this but I don't think this is actively maintained so it may not work with never versions of Java. A Google search for java decompiler will give you plenty of options.