Step 1:
Katha Sahitya refers to narrative and story literature.
Step 2:
Hitopadesha and Brihatkatha are famous examples of narrative literature.
Step 3:
Raghuvamsha is a Mahakavya, Nitishatakam is ethical poetry, and Dutavakyam is a drama.
Step 4:
Hence, the correct answer is:
\[
\boxed{\text{(3) A and D Only}}
\]