Put the onions,tomatoes,cashew nuts,ginger, garlic,spices and 1 cup of water into a pan and bring to a boil.
Cook on medium flame for at least 15-20 minutes. Remove from the heat and cool. Blend to a smooth puree/paste.
In a pan, heat the oil,butter,add the jeera and saute for 30 seconds.
Add kashmiri red chili powder,bay leaf,give a quick stir.
Then add onion-tomato pureed mixture.Close lid and cook on a medium heat for 2-3 minutes.
Add the paneer, kasoori methi,garam masala,salt.Mix well and bring the mixture to boil.
Finally, gently stir in the cream and paneer butter masala is ready to serve.
Serve hot with chapatti, naan,rice and onion slices.