The correct answer is option 4, which states that neither statement 1 nor statement 2 is correct.

Statement 1 is incorrect because Panchayati Raj is a three-tier system of governance and not a four-tier system. The three tiers are Gram Panchayat at the village level, Block Panchayat at the block level, and Zilla Parishad at the district level. There is no fourth tier in the Panchayati Raj system.

Statement 2 is also incorrect because the members of Gram Panchayat do not have the authority to hold Lok Adalats. Lok Adalats are alternate dispute resolution forums at the district level and are organized by the district judiciary, not by the members of Gram Panchayats.

Therefore, both statements 1 and 2 are incorrect. It is important to have a clear understanding of the structure and functions of the Panchayati Raj system to accurately answer questions related to it.