Heat 1 tsp oil in the same pan.
Add cumin seeds, bay leaf,dry red chilly and saute for few seconds.
Add finely chopped onions and saute till they turn soft and golden brown.
Add ginger garlic paste and mix well. Cook on low heat.
Add turmeric powder, red chilly powder, cumin-corianderpowder and mix well.
Next, add tomato puree and cook on low heat till the tomato puree is cooked well and the raw smell vanishes.
Add the kolhapuri masala paste and mix well. Cook on low heat.
Add salt, sugar and garam masala.
Add the cooked veggies and mix well.
Add onion, capsicum cubes and mix.
Add chopped paneer and mix well.
Add little water if required to adjust the consistency of the gravy. Cook on low heat for a minute or so.
Garnish with chopped coriander.
Serve hot with rotis, chapatis , naan or rice.