Separate the palak leaves from the bunch and wash thoroughly to get rid of any dirt or mud. Chop the onion and tomatoes finely. Peel and crush the garlic cloves finely. Bring plenty of water to a rolling boil in big vessel. To the boiling water now add 1/2 teaspoon sugar and mix well. Also add washed spinach and blanch them for 2-3 minutes.
Once the leaves are blanched wash the palak leaves in cold running water. Allow them to cool for few minutes. Now grind the blanched leaves to a smooth puree along with green chilies and ginger. You can also add few garlic cloves.
Heat oil or butter if you like in a thick bottomed pan. Add the bay leaf and saute for 2 minutes. Next add the crushed garlic and chopped onions. Saute them till the onion changes color slightly.
Now add chopped tomatoes and saute well till the tomatoes turn mushy.
Now add spinach puree and mix well. Add 1/4 cup water.
Also add the salt, chili powder, garam masala powder and sugar.
Mix well and cook for 3-4 minutes in medium heat.
Now add paneer cubes and simmer for 3-4 minutes.
Add fresh cream, mix well. Add lemon juice and mix.
Serve palak paneer curry hot with naan or roti. This curry goes well with jeera rice also.