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(ii) and (iii) are concerned, no dispute can be raised or was raised by the parties before us as the said conditions have been fully satisfied in the facts of this case.

9. Let us, therefore, deal with Condition No. (iv) first which says, "the matter directly and substantially in issue in the subsequent suit must have been heard and finally decided by the Court in the former suit". Learned counsel for the appellant sought to argue that since the former suit was decided ex parte, it could not be said that it was finally heard and decided by the court and therefore, Condition (iv) was not satisfied and the principle of res judicata could not be applied and accordingly the ex parte decree in the former suit would not operate as res judicata in the subsequent suit. We are unable to agree with this contention of the learned counsel for the appellant. In this case, admittedly, summons was duly served upon Kuppusamy and inspite of such service of summons, Kuppusamy thought it fit not to appear or to contest the suit filed against him. Once an ex parte decree is passed against Kuppusamy, in our view, the same should be taken as a final decision after hearing. It is well settled that an ex parte decree is binding as a decree passed after contest on the person against whom such an ex parte decree has been passed. It is equally well settled that an ex parte decree would be so treated unless the party challenging the ex parte decree satisfies the court that such an ex parte decree has been obtained by fraud. Such being the position, we are unable to hold that Condition No. (iv) was not satisfied and accordingly it cannot be held that the principle of res judicata would not apply in the present case. In the present case, admittedly, the appellant in her plaint had not made any case of fraud or collusion either against Kuppusamy or against the respondents herein. It is true that when the subsequent suit was filed, the ex parte decree in the former suit had not been passed and, admittedly it was passed during the pendency of the subsequent suit. But then it was open to the appellant to file an amendment of the plaint in the subsequent suit by introducing a case of fraud or collusion and by challenging the ex parte decree on the ground of fraud also although the ex parte decree was passed during the pendency of the subsequent suit. This, however, was not done by her. Therefore, in our view, since the appellant could not make out a case of fraud or collusion challenging the transaction by which she had purchased the suit property from Kuppusamy in the manner indicated above or, since, even the ex parte decree was also not challenged on the ground that Kuppusamy and respondent No. 3 colluded amongst themselves and out of such collusion, Kuppusamy during the pendency of the former suit sold out the suit property to the appellant, it is not open to the court to hold that the said ex parte decree would not operate as res judicata on the ground that the transaction between Kuppusamy and the appellant in respect of the suit property was a fraudulent one. In this connection, reference can be made to a decision of Madras High Court in the case of Arukkani Ammal Vs. Guruswamy [The Law Weekly Vol.100 (1987) 707] which was also relied on by the first appellate court. The Madras High Court in that decision observed as follows :-

"It is also difficult to appreciate the view taken by the District Munsif that ex parte decree cannot be considered to be 'full decree on merits'. A decree which is passed ex parte is as good and effective as a decree passed after contest. Before the ex parte decree is passed, the court has to hold that the averments in the plaint and the claim in the suit have been proved. It is, therefore, difficult to endorse the observation made by the Principal District Munsif that such a decree cannot be considered to be a decree passed on merits. It is undoubtedly a decree which is passed without contest; but it is only after the merits of the claim of the plaintiff have been proved to the satisfaction of the trial court, that an occasion to pass an ex parte decree can arise."

(Emphasis supplied).

We are in full agreement with this view of the Madras High Court holding that a decree which is passed ex parte is as good and effective as a decree passed after contest. A similar view has also been expressed by a Division Bench of the Allahabad High Court in the case of Bramhanand Rai Vs. Dy. Director of Consolidation, Ghazipur [ AIR 1987 All 100]. However, the learned counsel for the appellant relying on a decision of the Madras High Court, namely, A.S.Mani (deceased) by L.Rs. Thirunavukkarasu & Ors. Vs. M/s.Udipi Hari Niwas represented by Partners & Ors. [1996 (1) Madras Law Journal 171] invited us to hold that the principle of res judicata would not apply as the former suit was decided ex parte. This decision, in our view, is distinguishable on facts. In that decision, the observation that the ex parte decree shall not operate as res judicata was made on the basis that the earlier petition which was filed for eviction against the tenants was dismissed only on technical grounds, and after keeping this fact in mind only, the Madras High Court held that the ex parte decree would not operate as res judicata inasmuch as the petition was not heard and finally decided as contemplated in Section 11 of the CPC. Therefore, in our view, since condition No. (iv), as noted herein before, was satisfied, we hold that the principles of res judicata would be applicable in the present case as held by the First Appellate Court and also affirmed by the High Court.