Heat 2 tablespoons butter in a pan. Add cumin seeds, bay leaf, green cardamom and 1/4 inch cinnamon stick. Saute the whole spices for few seconds.
Add 1 cup finely chopped onions and saute for a minute.
Next add slit green chilies and 1 tablespoon ginger garlic paste or minced ginger and garlic. Saute until the raw flavor leaves.
Add the tomato puree and tomato paste. Mix well.
Saute till the tomatoes are cooked a bit.
Next add 1 teaspoon red chili powder, 1/2 teaspoon turmeric powder, 1/2 teaspoon cumin powder or jeera powder , 1/2 teaspoon coriander powder and 1 teaspoon garam masala powder. Mix well to combine.
Once the gravy base is well cooked add 1 cup water and mix well. Add salt to taste and 1/2 teaspoon sugar.
Bring the mixture to a boil.
Now add the cashew paste and mix well. Now if the gravy is too thick add 1 cup water again and simmer till the curry reaches desired consistency.
Next add fresh cream and mix. Also add the grated paneer and simmer for a minute. Finally add the cubed paneer and mix well gently. Simmer for a minute again.
Add ginger juliennes, crushed kasuri methi or dried fenugreek leaves and mix well. Add chopped coriander leaves and remove from flame. Serve restaurant style paneer lababdar curry immediately. See serving suggestions for meal ideas.