Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable of knowing the nature of the act, or that he is doing what is either wrong or contrary to law.

Simply Put

This section means if an act is done by a person of unsound mind, who is not able to understand the nature and consequence of his act will not be liable for the offence. For eg Bunty is 30 year male of unsound mind who injured Shayam with a knife, he won't be liable under this code due to his reason being insane.

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