Melt butter in a pan.
Add cloves, cinnamon, bay leaf and cardamom and fry for a minute.
Now add chopped onions and ginger-garlic paste and fry on medium heat for about 5-7 minutes till the onions are golden brown.
Add tomatoes and cashews and fry for another 8 minutes or till tomatoes are mushy.
Turn off the gas and cool down.
Now blend to a thick paste.
Heat the pan again and pour this thick gravy into it.
Stir it constantly on low heat. The gravy has the tendency to sputter so you can cover the pan half way.
Continue to stir for about 10-15 minutes till the gravy becomes glossy. This shows that it is well cooked.
Now add the coriander powder, garam masala, both kinds of chilly powder, sugar and salt. Add about a cup of water to make a thick gravy. Stir and taste. Adjust seasoning.
Add the paneer cubes in . Don't cook for more than 2-3 minutes now. Crush kasuri methi and add to the gravy.
Switch off the gas. Add a swirl of cream and mix well. This enhances the creamy texture of the gravy.
Serve hot with rotis, naan or rice