Soak the paneer in luke warm water for 15 min
To a small kadai or pan, dry roast the spices coriander seeds, dried red chilli, green cardamom, fennel seeds and cloves for kadai masala for 3 to 4 minutes on medium heat until fragrant. (Add more red chilies for a spicier masala).
Remove kadai from heat and transfer the roasted spices to a spice grinder.
Let it cool down a bit and then grind to a fine powder. Set aside. You can also make this kadai masala in advance and store it.
In a large kadai or any other pan, now melt butter with oil on medium heat.
Add the chopped onion and saute for 3 minutes until softened. Then add the sliced green chili and ginger garlic paste and saute for another 1 to 2 minutes.
Then add the chopped tomatoes and tomato paste. Mix and cook for around 6 minutes until tomatoes are really soft.
Then add 3 to 4 teaspoons of the kadai masala that you prepared earlier (or add the whole thing if you like it spicy). Also add the garam masala, kashmiri red chili powder.
Add half of the ginger julienne. Stir the spices and cook for 30 seconds.
Then add 1/2 cup water and stir.
Add cream, salt and sugar and mix. Cook for one minute.
Add in the paneer and bell peppers (capsicum) and mix. Cover the pan or kadai with a lid and cook for 5 to 6 minutes on medium heat until bell peppers are slightly softened. You only want them half cooked here.
Crush kasuri methi and add to the pan.
Garnish with remaining ginger julienne and cilantro. Serve kadai paneer with naan or paratha.
