Simmer chopped tomatoes, onion, cashews, garlic, ginger, and 1 cup of water in a covered pot over medium heat for 12-15 minutes until very soft.
Let the boiled mixture cool slightly, then blend in a high-speed blender until it forms an ultra-smooth, creamy orange paste.
Melt 1 tbsp butter and 1 tbsp oil in a pan. Sauté bay leaf and cracked cardamom pods for 30 seconds, then stir in Kashmiri chili powder.
Pour the blended paste into the spices. Cover and simmer on low for 8-10 minutes until you see tiny oil droplets separating on the surface.
Stir in garam masala, salt, sugar, and the drained paneer cubes. Simmer gently for 3-4 minutes to heat the paneer through.
Sprinkle crushed kasuri methi, stir in the heavy cream and remaining 2 tbsp butter. Garnish with fresh cilantro and serve warm.