Add tomatoes, dried red chilies, cashews, cinnamon stick, cloves and cardamoms to a pot or pan.

Pour water and cook covered until tomatoes turn soft and pulpy.

Cool this and add to a blender. Blend well till you get a smooth puree. The puree has to be smooth. If needed you may add little water and blend.

Heat oil in a pan. Then add add bay leaf and saute for a min.

Add finely chopped onions and saute until they turn completely and uniformly golden.

Next add ginger garlic paste and saute till the raw smell goes away. This takes about 1 to 2 mins.

Pour the tomato and spice puree to the pan.

Add red chili powder, salt, coriander powder and garam masala.

Mix and saute for about 2 to 3 mins. Cook covered for another 2 to 3 mins until the gravy thickens slightly.

Pour water and add sugar. Mix well. Cook covered on a medium heat until the gravy thickens and you see traces of oil over the gravy.

Taste test and add more salt if needed. Take kasuri methi to your palm, crush it and add it here. Also add grated paneer, cubed paneer and green chili.

Mix everything well and lower the flame completely. Cook just for 1 to 2 mins. Turn off the stove.

Pour cream and mix. Add coriander leaves and mix.

Keep the pan covered for 5 mins so paneer absorbs the flavors. Transfer to a serving bowl and garnish with coriander leaves. You can also garnish with more grated paneer & cream.

Serve paneer lababdar hot with roti, garlic naan or rice.