Cut paneer into 1-inch cubes.
Grind soaked cashew nuts cinnamon and green cardamom with 2-3 tbsp water into smooth paste.
Heat butter or oil in a pan.
Add onion and bay leaf and saute until onion becomes light brown.
Add ginger garlic and green chillies and saute for 1 minute.
Add tomatoes and cook over medium flame until butter starts to separate and tomatoes turn tender or for around 3-4minutes.
Take away pan from the stove.
Takeout and discard bay leaf from pan.
Let mixture cool for 5 minutes at room temperature.
Transfer all contents to mixer grinder jar grind into a smooth puree and transfer to a same pan.
Add cashewnuts paste turmeric powder red chilli powder paneer masala coriander powder and salt.
Stir and cook for 3-4minutes.
Add 3/4 cup water and bring it to boil.
Reduce the flame to low and cook for 3-4minutes.
Add paneer cubes and kasoori methi.
Cook for 3-4minutes or curry starts to thicken.
Stir in between occasionally to prevent sticking.
Turn off the flame and transfer to a serving plate.
Garnish it with coriander leaves green chillies and grated cheese and serve with naan parantha or rice.