Heat 1 teaspoon oil, toss and fry paneer cubes till golden yellow . Remove from pan and soak in water for 10 minutes or till use. (This step is optional, you can skip this step and use paneer directly)
In same pan , heat 1.5 tablespoon butter . Add bay leaf, cinnamon, clove, dry red chillies , coriander seeds and saute till aromatic.
Then add Onion, garlic cloves , ginger and fry till raw smell disappears. Add Tomato, salt and fry till its skin of tomato starts to shrink. Turn off the stove , allow to cool completely.
Once its cooled, discard the bay leaf and grind into smooth paste without adding water.
In the same pan, add 1 teaspoon of Oil and 1.5 tablespoon of butter , add ground paste, saute for 1-2 minutes till oil leaves the corners.
Add 1 to 1.25 Cup of water to mixer and rinse the jar well and add this water to the above masala.
Add Red Chilli powder, if adding and bring to boil on medium heat. Adjust salt
Soak Cashews in warm water for 10 minutes, grind to a smooth paste and add it to the above masala. Continue to cook for 2-3 minutes , when it starts to thicken , add paneer cubes, kasuri methi, garam masala and fresh cream.
Stir well everything , Keep on sim and cook for 5 minutes.
Once it reaches the required consistency, turn off the heat.
Add honey only after turning off the flame.
Serve hot with Garlic Naan, Roti, Kulcha, Peas Pulao or Jeera Rice.