An offer to refer a dispute to arbitration can be revoked before it is accepted, and the intention of the parties to an arbitration agreement may determine whether a vacancy created by the failure or inability of an arbitrator to act can be supplied.

( 1 ) THE petitioner filed the present petition under S. 8 of the Arbitration Act alleging that he was one of the directors of the company respondent No. 1, that he ceased to be the director of the company from 16th May, 1973, that disputes arose about the payment of gratuity and compensation for loss of office to him, that Shri S. Watel, Advocate, respondent No. 2 was appointed as an arbitrator, that Shri Watel expressed his inability to act as an arbitrator, that the agreement of reference does not show that the vacancy would not be supplied, that a notice dated 25th Feb. 1974 was served upon the company respondent No. 1 requiring it to concur in the appointment of Shri Inderjit Singh respondent No. 3 as sole arbitrator in the matter. As the respondent No. 1 did not concur in the appointment Of the arbitrator, the petitioner filed the present petition for the appointment of respondent No. 3 as sole arbitrator or any other person as an arbitrator to settle the two disputes regarding the payment of gratuity and compensation for the loss of office.

( 2 ) RESPONDENT No. 1 in its written statement has denied that Mr. Watel was appointed as an arbitrator, that in any case, it was intended that no other person would be appointed to settle the disputes. It was alleged that Mr. Watel was agreed to be appointed as referee but the petitioner dictated certain terms and conditions subject to which Shri Watel should proceed with the consideration of the matter which conditions were not acceptable to Mr. Watel, and therefore he did not accept to settle the disputes. The petitioner filed his replication reiterating the allegations contained in his petition. The following issues were framed on 28th Feb. 1975.

"1. Whether this court has territorial jurisdiction to try the petition? OPP. 2. Whether the dispute was referred to Shri S. Watel, Advocate for advice only and not as an Arbitrator? OPD 3. In case if the above issue is proved against the defendant, whether the dispute between the parties is liable to be referred to another Arbitrator because of the failure of Shri Watel to proceed in the matter? OPD 4. Whether the dispute between the parties is not referable to arbitration? OPD (Onus objected to) 5. Relief. "

( 3 ) THE entire correspondence between the petitioner and the respondent No. 1 regarding the alleged disputes and its settlement by a reference or an arbitrator was exchanged at Delhi and the respondent No. 1 has its office at Delhi, therefore, it is clear that this court has jurisdiction to decide the present petition. The issue is decided accordingly in favour of the petitioner.

( 4 ) ISSUE Nos. 2,3 and 4. It would be convenient to decide all these issues together. On 16th May 1973, the petitioner as per Resolution Ex. P-6-A ceased to be the director of the company respondent No. 1. The petitioner claimed that he is entitled to payment of gratuity and compensation for loss of office. On 10th Sept. 1973, the company respondent No. 1 wrote a letter (Ex. P. 2) to Shri Watel, Advocate, respondent No. 2 to the following effect and sent a copy to the petitioner.

"as you are aware, S. Amrik Singh Bhandari who was a Director of this Company has sold the shares held by him and other members of his family and terminated his association with the company on 16th May 1973. At the time of finalising his accounts with the company, Mr. Bhandari had raised two questions : (a) Payment of Gratuity (b) Compensation for loss of office. In his opinion, the amount of gratuity offered to be paid by the company was insufficient and compensation for loss of office in accordance with the provisions of Company Law was payable. In the company s opinion, the amount of gratuity payable was fair and no compensation was payable for loss of office. In order to amicably resolve these issues, it was agreed between Mr. Bhandari and us that a joint reference should be made to you with an agreement that your ruling on these matters would be acceptable to