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Kaadu is a study of traditional society in two remote Indian villages, Koppal and Hosur, separated by a forest, and isolated from the outside world. The story begins with the 'Nyaya'. the meeting of the village court, in Koppal. The village elders have gathered to decide on the punishment of a servant from Hosur, who has seduced another man's wife. The servant's master turns up at the meeting to see that justice is done, but his presence breaks the taboo on outsiders participating in a Nyaya. A fight ensues, and the meeting finishes in confusion. This leads to a developing feud between the two villages; animals are poisoned and corn set alight.

Eventually, the police descend on the villages and take away the young men they hold responsible. The inhabitants retreat into their houses, having lost even the right of the Nyaya, to control their own affairs.

All these tragic events are seen through the eyes of Kitti, an eight years old boy on a visit to Koppal, who is deeply attached to the surrounding jungle, the jungle that by the end of his stay, has become the symbol of the adult world surrounding him.