Direct Answer
Section 3 dictates when a suit or claim is legally considered “instituted” to stop the limitation clock. It draws a strict distinction between a Set-off (adjusting a recognized mutual debt) and a Counter-claim (an independent cross-action).
• Set-off: Treated as a defense. It is deemed to have been instituted on the EXACT SAME DATE the plaintiff filed the original suit.
• Counter-claim: Treated as a separate suit. It is deemed to have been instituted on the date the counter-claim is actually filed in court.
• Counter-claim: Treated as a separate suit. It is deemed to have been instituted on the date the counter-claim is actually filed in court.