In a small grinder jar add red chillies, fennel seeds (optional) and coriander seeds. Make a fine powder and keep aside.
Heat ½ tsp oil in a pan and add one cup onion and cashew nuts. Saute them on a medium high flame until the onions turn transparent or pink.
Add one cup tomatoes and saute until completely mushy.
Cool this completely and add this to a blender jar. Blend to a smooth pure or paste. Set this aside.
In the same pan add ½ tsp oil and heat it. Saute cubed onion and capsicum on the highest flame until half fried. They must be slightly tender and crunchy.
Add paneer and toss for 1 to 2 minutes. Set all these aside. Do not over fry these.
How to make kadai paneer:
Heat 1 tbsp oil and saute 1 tsp ginger garlic paste until the raw smell goes off.
Next transfer the ground kadai masala and saute for 2-3 minutes until it turns fragrant. Ensure the raw flavour has gone from the masala.
Add the ground onion tomato paste and saute for 2 mins.
Next add garam masala and red chilli powder. Saute for another 2 mins until the masala turns fragrant.
Pour ¾ cups of water and salt. Allow it to boil until the gravy thickens and traces of oil appears on the top.
Then crush and add kasuri methi. Stir well again, taste test the gravy and add more salt it needed.
Add the sautéed paneer, capsicum and onions.
Stir well and finally add ginger juliennes and coriander leaves.
Cover and rest for 2 minutes. Transfer to a serving bowl and rest for at least 15 mins for the paneer to observe the flavour.
Notes
Serving Tip: Enjoy this kadai paneer with roti, paratha or jeera rice.