Heat oil and sauté onions, garlic, ginger, cashews, green chili, and salt until soft.
Add tomato, cook until mushy, then add capsicum and fry until softened.
Add coriander leaves and spinach. Cook until wilted, then grind to a fine paste.
Toast paneer cubes in oil until golden brown. Set aside.
Heat oil, add whole spices and green chili. Pour in the green paste and cook for 5 minutes.
Add curd, spice powders, and cook for 15 minutes on low flame.
Add paneer and mix well. Cook for 2 minutes.
Add kasuri methi, garam masala, sugar, and water. Simmer for 10 minutes.
Serve hot with roti or rice.