The principle requires oral evidence to be direct, meaning it must come from the person who actually saw the event, and hearsay evidence, evidence about what someone else said they saw, is not evidence at all. X was told by Y, someone X trusts, that Z murdered A, but X did not witness the murder personally.
Because X's knowledge of the murder comes only from what Y told him and not from anything X saw himself, his statement is hearsay, which the principle treats as no evidence at all.
Therefore, the correct answer is Statement of X is not admissible because he has not seen Z murdering A.
The fact that decides this question is where X's knowledge actually comes from, not from personally witnessing the murder, but from what Y told him. The principle requires oral evidence to come from direct observation, so each option can be tested against that single source question.
Testing each option against the single question of source, direct observation versus secondhand account, leaves only the option finding the statement inadmissible.
Therefore, the correct answer is Statement of X is not admissible because he has not seen Z murdering A.