Which one of the following statements correctly describes the meaning of legal tender money?

Correct Option: The money which a creditor is under compulsion to accept in settlement of his claims.

Step-by-Step Explanation:

1. Concept of Legal Tender Money:
Legal tender money refers to any form of currency that is legally recognized by the law of a country as a valid medium of exchange. By law, it must be accepted for discharge of any monetary debt or obligation.

2. Legal Compulsion on Creditors:
When a debtor offers legal tender money to a creditor to pay off a debt or settle a claim, the creditor is legally bound and obligated to accept it. Refusing to accept legal tender money for settlement of debts is an offense under the monetary laws of the jurisdiction.

3. Distinction from Other Forms of Money:
- Bank Money (Cheques, Drafts, Bills of Exchange): These are forms of optional money or credit money. A creditor is not legally compelled to accept a cheque or a demand draft; they can insist on payment in official currency.
- Court Fees: Legal tender is not restricted only to paying court fees.
- Metallic Money vs. Paper Money: Legal tender includes both paper currency notes and coins issued by the central authority/government, not just metallic money.

Conclusion:
Therefore, legal tender money is best defined as the money which a creditor is legally compelled to accept in settlement of their claims.