When a decree is passed against a defendant who was never served with summons and never got a chance to contest, the CPC gives a specific remedy for that situation. The question asks what that remedy is, and each option needs to be checked against the actual procedure available.
Only an application to set aside the ex-parte decree, grounded in the lack of service, matches the specific remedy the Code provides for this situation.
Therefore, the correct answer is By applying for setting aside the ex-parte decree.