Summary of the chapter god lives in the panch  is
it is a story which tells us that justice neither looks friend nor enemies. When alagu was the head panch he did not take the side of his friends . he spoke for the truth .And again after 2 yrears when jumman was the head panch he did not take side of his enemy alagu .he even soke for the truth . this is all in the story

 God lives in a panch ---> this chapter is about justice..and that justice has no friend or enemies. Alagu the head Panch didn't support his friends and spoke only for the truth. 
Two years later Jumman the head panch then didn't try to punish his enemy Alagu..
everyone spoke the truth, and justice was done.