As per case facts, a contractor-state dispute over a hospital construction claim led to a Superintending Engineer's appointment as arbitrator. Despite many sittings, proceedings stalled. The respondent sought the Arbitrator's ... resignation, which he refused, also declining to extend arbitration time and leaving future action to the parties. The Chief Engineer refused to appoint a new arbitrator, so the respondent approached the Assistant District Judge, who found the Arbitrator refused to act and appointed a new one. The High Court upheld this. The State appealed, arguing the agreement allowed the original Arbitrator to nominate a successor. The question arose whether an arbitrator's refusal to resign and extend time constitutes a "refusal to act" under Arbitration Act, 1940, Section 8(1)(b), and if the Court or agreement dictates the next appointment. Finally, the Supreme Court held that the Arbitrator's actions constituted a refusal to act. When an appointed arbitrator refuses to act, and the agreement doesn't explicitly prohibit filling the vacancy, the arbitration clause is exhausted. The Court then has jurisdiction under Section 8(1)(b) to appoint a new arbitrator, as seen in this case. The Court found no error in the lower courts' inference. A nominee's refusal also implies the original arbitrator's refusal, exhausting the clause.