Based on the provided legal document, the key points relevant to your query are as follows:

1. The civil suit was initially disposed of through a settlement reached via a mediation agreement, which was recorded and resulted in a decree (!) .

2. It is noted that all three defendants had set ex parte, meaning they did not participate in the proceedings at some stage. However, D1 later set aside the ex parte order, which implies D1 took steps to participate or re-enter the proceedings after initially being absent (!) , (!) .

3. D1 entered into a mediation agreement, which was signed by the parties and their respective counsel, and this agreement was ultimately approved by the court, leading to a decree (!) – (!) .

4. The court’s final order was to dispose of the suit based on the mediation agreement, and the decree passed was in terms of that agreement (!) .

5. Generally, a decree passed on the basis of a settlement or mediation agreement is binding on the parties who participated in the process and signed the agreement. However, the enforceability of such a decree against other defendants who were set ex parte and did not participate in the mediation or the subsequent proceedings may depend on whether they were properly served, whether they were parties to the settlement, and whether the court explicitly extended the decree’s binding effect to all defendants.

6. Since the other defendants were set ex parte and did not participate in the mediation or the court proceedings after setting ex parte, the decree primarily binds only those parties who actively participated and signed the mediation agreement, i.e., D1.

7. The fact that D1 set aside the ex parte order and entered into a mediation agreement does not automatically bind the other defendants who remained ex parte, unless the court specifically included them in the decree or the settlement explicitly extended to all defendants.

Conclusion: The decree based on the mediation agreement is primarily binding on D1, who participated in and signed the agreement. The other defendants who remained ex parte are generally not bound by the decree unless the court explicitly directed that the decree or settlement would be binding on all defendants, including those who did not participate. The court’s order and the terms of the mediation agreement suggest that the decree was passed in terms of the settlement between the parties who participated, which likely does not automatically extend to the ex parte defendants.

Recommendation: To determine the binding effect on the ex parte defendants conclusively, one should review the specific court order and the decree to see if it explicitly states that it is binding on all defendants or only those who participated in the mediation.