Heat oil in a saucepan and add in 1 teaspoon cardamom seeds. Cook until they pop open, be careful of splatter.

Add onions and cook the mixture for 3 minutes or until translucent. Then add in tomatoes and salt and cook for another 3 minutes uncovered. The cover the pan and cook the tomatoes until soft and mushy.

Add in sugar, cashews, chili powder, garam masala, and coriander powder. Stir and let cook for 3-5 minutes and then let cool until room temperature (or just a little higher). Transfer to a food processor and puree until smooth.

In a large saucepan, melt butter over medium heat. Add in bay leaf, ½ teaspoon cardamom seeds, and cloves. Reduce heat to low and cook until the seeds pop open. Add in garlic and ginger and sauté for 2-3 minutes.

Pour tomato puree into the saucepan and add ½ cup water and mix. Cover and cook until thickened. Traces of butter and oil will be visible on top. Add salt and chili powder as needed.

Add in paneer and cook over low heat for an additional two minutes. Remove from heat and add cream.

Serve hot with rice or naan. Top with cilantro if desired.