Explanation
- A
The money which is tendered in courts of law to defray the fee of legal cases
(a) Money tendered in courts to pay legal fees. That is a pun on ‘legal’, not the definition of legal tender. This is not the key.
- B
The money which a creditor is under compulsion to accept in settlement of his claims
(b) The money which a creditor is under compulsion to accept in settlement of his claims. (b) Official key: Legal tender is currency that the law requires a creditor to accept in discharge of a money debt. RBI notes are unlimited legal tender; coins are limited by denomination. That is the stored key.
- C
The bank money in the form of cheques, drafts, bills of exchange etc.
(c) Bank money such as cheques and drafts. Those are credit instruments, not legal tender; a creditor may refuse a cheque. This is not the key.
- D
The metallic money in circulation in a country
(d) Metallic money in circulation. Coins can be legal tender within limits, but legal tender is not defined as ‘all metallic money’. This is not the key.
Summary. Official key is (b). Legal tender is money a creditor must accept in settlement of a claim. Court fees, cheques and ‘metallic money’ as such do not define it. Honour the stored letter (b).
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.