The principle here restricts oral evidence to what a witness has personally seen or perceived, and treats a secondhand account, hearsay, as no evidence at all. X did not witness the murder; he only heard about it from Y. Let's weigh each option against this rule.
Only the second option correctly applies the rule: since X did not personally see Z murder A, his account is hearsay and cannot count as oral evidence of that fact.
Therefore, the correct answer is Statement of X is not admissible because he has not seen Z murdering A.
Under the stated principle, oral evidence is only good evidence when it comes from someone who directly perceived the fact themselves; anything relayed from another person is hearsay and carries no evidentiary value. A simple two-part test captures this, first ask whether the witness perceived the event with his own senses, and second, if not, ask whether any special quality of the source, trust, reputation or standing, could substitute for that direct perception. Under the rule as stated, nothing substitutes for direct perception. Let's apply this test to each option.
X never perceived the murder himself, and the rule allows nothing, neither the source's trustworthiness nor the witness's own reputation, to stand in for that direct perception.
Therefore, the correct answer is Statement of X is not admissible because he has not seen Z murdering A.