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I set security context for a folder as 702 to enable other users to create and delete folder contents.But whenever other users try to create a folder,its says "Permission denied".Can anyone please tell me the reason?
If you really want everyone to be able to write there you should also let them read (so they can see what file are there) and also execute so they can cd there. If this is what you want then, set it to 777.
Regarding the specifics of your question it may be because those users are in the group that owns the directory, but you have set it to not be group writable.
I know that execute permissions are required to enter the directory, I guess it seems logical that to write to a directory, on some level you would need to enter it. I'm sure a proper answer could be found somewhere in some unix documentation.