Contingent creditor standing in winding-up turns on overall insolvency and may require leave before petition admission.

In winding-up proceedings, a contingent or prospective creditor is treated as a creditor for locus standi purposes, because a guaranteed liability may mature into an indebtedness if the contingency occurs. The inquiry is not confined to whether the company presently owes money to the petitioning creditor, but whether the company is unable to pay its debts as a whole, including contingent and prospective liabilities. Where a petition is presented by a contingent creditor, leave of court may be required before admission can properly be ordered under the winding-up framework and relevant rules. The discussion also notes that the company's broader financial position, including unpaid liabilities and lack of revival prospects, is material to admission.

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Issues: (i) Whether a contingent creditor had locus standi to present a winding-up petition; (ii) Whether refusal to admit the petition on the ground that the petitioner had no present debt payable by the company was legally sustainable; (iii) Whether leave of court was a condition precedent to admission of the petition by a contingent creditor.

Issue (i): Whether a contingent creditor had locus standi to present a winding-up petition.

Analysis: A creditor for the purpose of winding up includes a contingent or prospective creditor. The petitioner's liability under the guarantees was contingent, and if the contingency materialised, the company would become indebted to him. That contingency was sufficient to confer standing to move the court.

Conclusion: The petitioner had locus standi as a contingent creditor.

Issue (ii): Whether refusal to admit the petition on the ground that the petitioner had no present debt payable by the company was legally sustainable.

Analysis: The relevant inquiry under the winding-up provisions is whether the company is unable to pay its debts as a whole, taking into account contingent and prospective liabilities, and not whether it presently owes money to the petitioning creditor alone. On the material, the company had substantial unpaid liabilities, had ceased business, and there was no real prospect of revival. The refusal to admit the petition on the narrow ground adopted below was therefore erroneous.

Conclusion: The refusal to admit the petition on that ground was not sustainable in law.

Issue (iii): Whether leave of court was a condition precedent to admission of the petition by a contingent creditor.

Analysis: For a petition by a contingent or prospective creditor, leave under the winding-up provisions and the relevant rules had to be sought before admission could properly be ordered. Since no such application had been made, the appellate court did not itself admit the petition and remitted the matter for fresh consideration.

Conclusion: Leave was required before admission, and the matter had to be reconsidered by the company judge.

Final Conclusion: The order refusing admission was set aside, and the matter was remitted for fresh disposal in accordance with law, including consideration of leave requirements for a contingent creditor.

Ratio Decidendi: In winding-up proceedings, the company's inability to pay is judged by its overall debts and contingent liabilities, not by the existence of a presently enforceable debt due to the petitioning creditor; a contingent creditor may maintain the petition, but admission may await the requisite leave where the statute so requires.

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