1. For spice paste, in a pan, add coconut, ginger, garlic, cinnamon, cloves, bay leaves, curry leaves, and peppercorns. Dry roast for 5 minutes or until coconut in browned. Let it cool.
2. Put roasted spices into the food processor. Gradually pour a cup of water, and grind to make a fine paste.
3. Place a large pot on flame, and heat vegetable oil in it.
4. Add shallots, and cook for 5 minutes or until tender.
5. Drop the spice paste, coriander, turmeric, chili powder, and salt. Give it a good stir.
6. Pour 1 2/3 cup of water. Stir and bring it to a boil.
7. Throw lamb pieces into the pot. Mix well. Reduce the heat to medium, cover, and cook for 30 minutes or until done.
8. For tempering, in another pan, heat oil and add mustard seeds. Let it crackle.
9. Add curry leaves, and green chilies. Stir fry for a minute.
10.Pour tempering into the lamb curry. Stir, and continue cooking for about 5-10 minutes or until gravy is rich and thick.
11. Serve lamb curry hot with paratha, and salad.