Thank you stevieb and thomas895. I read through some articles as directed by thomas895 about suexec but it seems a little complex for me to understand and time consuming to get done. And they have clearly mentioned that don't do it if you don't know what you are doing.

So I'll take the suggestion from stevieb to create a new group and add both apache and application user to that group. Then will give this group write permission on the dir1 directory.