Section 118 IEA on competency of witnesses provides that every person is competent to testify UNLESS the court considers him prevented from understanding the questions or from giving rational answers because of:

1. Section 118 IEA: 'All persons shall be competent to testify unless the Court considers that they are prevented from understanding the questions put to them, or from giving rational answers to those questions, by tender years, extreme old age, disease, whether of body or mind, or any other cause of the same kind.' 2. The Explanation makes clear that a lunatic is not incompetent to testify, unless he is prevented by his lunacy from understanding the questions or giving rational answers. 3. The competency test is functional — can the witness understand and answer rationally? 4. Children of tender years are not automatically incompetent; the court may conduct a voir dire (Rameshwar v. State of Rajasthan, AIR 1952 SC 54). 5. Hence option B is correct. _Source: Indian Penal Code 1860 / Code of Criminal Procedure 1973 / Indian Evidence Act 1872 (Bare Acts, indiacode.nic.in) — Indian Evidence Act, Section 118_