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Sauté Gravy Base: Heat 4 tbsp oil in a kadai over medium heat. Add chopped onions, cashews, tomatoes, green chillies, and 1/2 tsp salt. Cover and cook for 3–4 minutes until soft and pulpy. Remove to a plate to cool.
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Pan-Fry Paneer: In a separate pan, heat 2 tbsp oil over medium heat. Add paneer cubes and fry for 2–3 minutes until lightly golden brown. Transfer to a bowl and set aside.
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Blend Paste: Place cooled onion-tomato-cashew mixture into a blender jar and grind into a smooth, thick paste.
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Temper Whole Spices: In the same kadai, heat 2 tbsp oil. Add cumin seeds, cinnamon stick, cloves, and bay leaf; fry for 25–30 seconds. Add ginger-garlic paste and sauté for 1 minute until fragrant.
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Cook Gravy Base: Pour in the blended paste. Stir in turmeric powder, red chilli powder, coriander powder, and salt. Cover and cook on medium-low for 3–4 minutes until oil begins to separate at the edges.
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Simmer & Finish: Add 3/4 to 1 cup warm water to create a fluid gravy. Add the fried paneer pieces, cover, and simmer for 2 minutes. Sprinkle garam masala powder, simmer for 1 more minute, garnish with coriander leaves, and serve hot.