Creditor and contributory locus under Rule 79 is distinct from confirmation merits; majority and disclosure objections arise later.

Rule 79 of the Companies (Court) Rules, 1959 permits a creditor or contributory, with leave of the court, to present a petition for confirmation when the company does not do so. The applicants were already recognised in earlier orders as persons entitled to be treated as creditors and members, and the official liquidator had not filed the confirmation petition, so leave was properly granted. Objections on statutory majority, voting strength, chairman's acceptance of higher claims, and adequacy of financial disclosure were held to concern the merits of confirmation under section 391(2) of the Companies Act, 1956, and not the threshold issue of leave.

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Issues: Whether the applicants had locus standi to present the petition under rule 79 of the Companies (Court) Rules, 1959, and whether objections relating to the requisite majority, voting strength, and financial disclosure were to be examined at the stage of leave or at the stage of confirmation of the scheme.

Analysis: Rule 79 permits a creditor or contributory, with leave of the court, to present a petition for confirmation where the company fails to do so. The applicants had been recognised in the earlier orders as persons entitled to be treated as creditors and members for the purposes of the proceedings, and the official liquidator had not filed the petition for confirmation. The court further held that controversies concerning whether the scheme had secured the statutory majority, whether the chairman had permitted voting on higher claims, and whether the latest financial position had been sufficiently disclosed were matters going to the merits of confirmation under section 391(2) of the Companies Act, 1956, and not grounds for refusing leave under rule 79 at that stage.

Conclusion: The applicants were competent to move the application, and leave to present the petition was rightly granted; the merits of the scheme and related objections were left for decision at the confirmation stage.

Ratio Decidendi: Under rule 79, where the company does not present a petition for confirmation of a compromise or arrangement, a creditor or contributory may seek leave to do so, and issues concerning statutory majority or the merits of the scheme are to be decided at the confirmation stage, not at the stage of granting leave.

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