Heat a wide pan and add about 1 tablespoon or butter or oil. Cube the paneer into ½ inch pieces and shallow fry them. Drain the paneer into a bowl with hot water and let them sit in the water until ready to use. This keeps the paneer soft.
In the same pan add a tablespoon of oil . Fry the cloves and cinnamon for a minute until aromatic.
Now add the chopped onions and saute them until translucent. Now add the ginger and the garlic pieces and fry for couple of minutes.
Add the chopped tomatoes along with cashew nut and saute them until the tomatoes are mushy.
Transfer this mixture to a blender jar and once cooled completely, grind it into a smooth paste. Makes sure you let the mixture cool down before grinding or else the whole kitchen will be a mess. I have been there and done that and trust me it is not fun!!
In the same pan, heat the remaining oil/butter and add the bay leaf. Next add the ground masala and let it cook in low/medium heat until aromatic and the oil separates from the mixture. This takes about 10 minutes. You might want to cover the pan when doing this as the masala tends to splatter.
Add the dry spice powders; turmeric powder, red chili powder, coriander powder and salt and let it cook for 5 more minutes.
Drain the paneer and add it to the gravy. Add water as needed to adjust the consistency.
At this stage, crush some kasoori methi and add it to the subzi. You could add cream if you like and then let it simmer for about 5 minutes. I skipped the cream as the cashews gave the subzi enough creaminess.
I served my Restaurant Style Paneer Butter Masala with Avocado Paratha and Mutter Pulao.