Grind ingredients from peanut to salt, adding a little water, till smooth.
In a small saucepan, heat oil and splutter the mustard seeds.
Add the urad dal, curry leaves and dry red chilli and fry for a couple of seconds.
Add the peanut chutney paste and add turmeric powder. Adjust seasoning. and allow it to cook on very low flame just till the raw smell is gone.
Switch off and serve hot with idlis or dosas.