This is the chutney they serve it with Medhu vada , idly and Dosa in Restaurants.

About Chutney:

Chutney (also transliterated chatney or chatni) is a family of condiments mainly associated with South Asian cuisine that usually contain some mixture of spice(s), vegetable(s), and/or fruit(s). There are many varieties of chutney.
Chutneys may be either wet or dry, and can have a coarse to a fine texture. The Indian word refers to fresh and pickled preparations indiscriminately, with preserves often sweetened. Several Indian languages use the word for fresh preparations only. A different word achār(Hindi: अचार) applies to preserves that often contain oil and are rarely sweet. Vinegar, citrus, tamarind, or lemon juice may be added as natural preservatives, or fermentation in the presence of salt may be used to create acid.
The name "chutney" covers a wide variety of foodstuffs. The common element which makes them all "chutneys" is that they are added to meals to add flavour; the best English "translation" of "chutney" is "relish". As such, they can be, and are, eaten with a wide variety of foods.
Traditionally, chutneys are ground with a mortar and pestle made of stone or an ammikkal (Tamil). Spices are added and ground, usually in a particular order; the wet paste thus made is sautéed in vegetable oil, usually gingelly (sesame) or groundnut (peanut) oil. Electric blenders or food processors can be used as labor-saving alternatives to stone grinding.


Ingredients:

Coconut - 1 cup,shredded
Green Chillies -2 
Tamarind - 1 pea size(don't add more than this)
Salt - as needed
Water - to grind

For Tadka:

Oil -1 tsp
Mustard Seeds - 1 tsp
Curry Leaf - 1 sprig
Dry Red Chillies - 1 broken

Method:

1.Grind Coconut , chillies,Salt and tamarind to a fine paste by adding some water.

 2.Now heat a pan and add oil and nce its hot add mustard seeds,once they splutter add curry leaf red chillies and toss them few seconds and remove from flame.
 3.Add the tadka to the coconut mixture.(* Don't add coconut mixture to hot pan,it will cook coconut and will change the taste of chutney)
 4.Delicious Chutney is ready.Serve it hot idly or dosa.


Tips:

Store Chutney in refrigerator and if you are going to use it thaw it 3 hrs before using ,don't heat it ,that will taste bad