(a) In computing ‘the period of limitation prescribed for any suit, the time during which the plaintiff has been prosecuting with due diligence another proceeding whether in a court of first instance or in a court of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction, or other cause of a like nature is unable to entertain it. (Section 14).
The three essential requisites for excluding the time spend in taking proceedings; in a wrong court is (1) identity of the cause of action, (2) good faith of the plaintiff, and (3) absence of jurisdiction or other cause of like nature in the court which entertained the prior litigation.
If the conduct of the person claiming the exclusion of time has been bona fide, that is, he has established his good faith, if he has been prosecuting, with due diligence, another civil proceeding, he is entitled to exclusion of time. If any of these elements is lacking, he cannot take advantage of it.
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(b) The Privy Council have held that a proceeding before an arbitrator is a civil proceeding, and in computing the period of limitation, an arbitrator should exclude the time spent in prosecuting in good faith the same claim before another arbitrator who was without jurisdiction.
(Ram Datt Ram Kissen v. Sasson and Co., A. I. R. 1629 P. C. 103). Our own High Court has held in Behari v. Punjab Sugar Mills Co. Ltd, 1943 A.L.J. 69 that the proceedings before the arbitrators are proceedings in a court and section 14 applies to a suit filed by a party to the reference to enforce his right under this contract when the arbitration is closed on the withdrawal of one of the arbitrators. But a contrary view has been taken Maharaj Sal v. Kedar Nath, A. I. R. 1933 Nag. 130 in which it was held that in a suit brought in a Civil Court, the time taken in previous arbitration proceedings relating to the subject-matter of the suit cannot be excluded.