Module: General Practice
Q175: Consider the following Assertion and Reason regarding Electronic Cheques.
Assertion (A): An "Electronic Cheque" as defined in Section 6 involves the use of a digital signature (with or without biometrics) and asymmetric crypto system.
Reason (R): A "Truncated Cheque" is legally distinct from an "Electronic Cheque" because the former starts as a physical paper instrument while the latter is born digital.
Reason (R): A "Truncated Cheque" is legally distinct from an "Electronic Cheque" because the former starts as a physical paper instrument while the latter is born digital.
✅ Correct Answer: B
Assertion (A) is True: The definition of "Cheque in the electronic form" (Explanation I-a to Section 6) specifically requires the use of a secure system ensuring the minimum safety standards with the use of digital signature (with or without biometrics) and asymmetric crypto system.
Reason (R) is True: There is a legal distinction.
A Truncated Cheque is a physical paper cheque that is scanned (truncated) during the clearing cycle.
An Electronic Cheque is "born digital"—generated, signed, and transmitted entirely in electronic form from the start.
Logic: While both statements are legally correct definitions found in Section 6, the distinction (Reason R) does not explain the technical requirement of crypto systems in Assertion A. They are two parallel concepts defining different types of instruments.
Reason (R) is True: There is a legal distinction.
A Truncated Cheque is a physical paper cheque that is scanned (truncated) during the clearing cycle.
An Electronic Cheque is "born digital"—generated, signed, and transmitted entirely in electronic form from the start.
Logic: While both statements are legally correct definitions found in Section 6, the distinction (Reason R) does not explain the technical requirement of crypto systems in Assertion A. They are two parallel concepts defining different types of instruments.