The judgment established that a person incompetent to contract by law cannot be bound by S. 65, Contract Act, and that the existence of a contract is a prerequisite for the application of S. 65.

1. This appeal arises out of a suit on a promissory note for Rs. 27,169 which was admittedly executed by the defendant in the plaintiff's favour on 1st August 1930. The plaintiff alleged in the plaint that the consideration for this promissory note was paid in cash at the time of execution, but in the course of the pleadings he withdrew from this position and admitted that the consideration consisted entirely of past consideration. Between 8th October 1920 and 1st August 1930 the defendant executed a series of promissory notes, receipts or acknowledgments in favour of the plaintiff, and the plaintiff eventually admitted that no fresh advance was made to the defendant after 2nd May 1923 when the receipt or acknowledgment, Ex. P-6, for Rs. 14,776-12-9 was executed. The subsequent documents were merely renewals of that liability. It is admitted that Rs. 11,036 was advanced by the plaintiff to the defendant at the time of the execution of the first document, Ex. P-5, and the plaintiff contends that there has been no fresh advance since then. The question therefore is whether the promissory note in suit can be traced back ultimately to the transaction of 8th October 1920, as the defendant contends, or whether it can be traced back only to the transaction of 2nd May 1923, as the plaintiff contends. The importance of this point lies in the fact that the defendant's estate was under the supersedence of the Court of Wards in 1920 and was released from superintendence in 1921, and that by S. 31, Central Provinces Court of Wards Act of 1899, a Government ward is incompetent to enter into any contract which may involve him in pecuniary liability and his property is not liable under S. 68, Contract Act.

2. The position then is that the consideration for the promissory note in suit was advanced at a time when the defendant's estate was under the superintendence of the Court of Wards and therefore by S. 31, Central Provinces Court of Wards Act of 1899, the defendant was incompetent to enter into any contract which might involve him in pecuniary liability and his property was not liable under S. 68, Contract Act. It has however been urged on behalf of the plaintiff that he is entitled to recover the money lent under S. 65, Contract Act, which funs as follows :

When an agreement is discovered to be void or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it: and reliance has been placed upon the decision in 20 N.L.R. 87 Narayan v. Motisa,1924 AIR(Nag) 132. S. 11, Contract Act, lays down that a person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject. This section and its results were discussed at length by a Full Bench of this Court in 13 N.L.R. 130 Mt. Salu Bai v. Bajat Khan,1917 AIR(Nag) 215. Stanyon, A.J.C. in the course of his judgment remarked as follows : Persons declared incompetent are those who (i) have not attained majority; (ii) are of unsound mind : or (iii) are disqualified by law. A minor may contract after he has attained majority. An insane person may contract daring a lucid interval. A person disqualified by law may contract as soon as his disqualification has ceased. It is manifest that the third of the above categories has reference to persons who are neither minors nor insane : and that, for the purposes of the law of contract, it treats such persons while disqualified, as ejusdem generis with minors and lunatics. It places them under a general category of persons without the capacity to contract. The competency laid down by S. 11 is indispensable for the formation of an agreement which may become the embryo of a contract, and unless it is present in both parties the result is infertility. It will also be noted that such comp