Additional Sessions Judge Sanjeev Aggarwal said the order of the Juvenile Justice Board (JJB) was passed in the overall interest of the minor.
The court, however, diluted the murder charge and held him guilty of the offence of culpable homicide not amounting to murder.
"Considering the age of the juvenile and the atmosphere in which he committed offence and his tender age, it has been rightly observed by the JJB that he has to be kept away from the vitiated atmosphere so that good morals and psychological counselling could be imparted to him," the court said.
"It was ordered that it was not conducive for mental growth and development of the juvenile to send him back to the vitiated atmosphere in which he had committed the offence," it noted.
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His counsel said the incident was neither planned nor intentional and the JJB erred in convicting him for murder.
The sessions court, however, said the juvenile was already carrying knife at the time of incident and he stabbed the victim on his chest causing deep injury leading to his death.
While modifying the provision of the IPC imposed on him, the court said only one stab blow was given by the juvenile which was quite deep and thereafter he ran away from the spot.