Heat 2-tablespoons butter in a pan over medium flame. Add bay leaf, cinnamon, green cardamom and cumin seeds. Sauté for 30 seconds. Add chopped onion, garlic and cashew nuts.

Sauté until onion turns translucent. Add chopped tomato, dry kashmiri red chilli and salt. Sauté for 4-5 minutes. Add kasuri methi (dried fenugreek leaves) and 3-tablespoons water. Cook until tomatoes turn soft, it will take around 2-3 minutes.

Turn off the flame. Let the mixture cool for a while. Transfer it to the jar of a mixer grinder and make a smooth paste. If required, add 2-3 tablespoons water while grinding.

Heat 1-tablespoon butter in the same pan over medium flame. Add 1/2 teaspoon crushed garlic (or garlic paste) and 1-teaspoon red chilli powder. Mix well and add the prepared paste. Stir continuously and cook until butter starts to release from sides. It will take around 3-4 minutes.

Add 1-cup water and 1-teaspoon sugar. Mix well using spatula.

As the gravy splatters, cover it with a lid and cook for 3-4 minutes. Stir occasionally in between to prevent sticking.

Remove the lid. Taste the gravy for salt and sugar and if required, add more at this stage. Add paneer cubes.
Mix well and cook for 2-minutes. Add 3-tablespoons fresh cream.