Heat the oil in a heavy-bottomed pan over medium heat. Add the bay leaf, cardamom, cloves, and cinnamon stick. Sauté for 1 minute until fragrant.
Add the sliced onions and cook until golden brown, stirring occasionally (about 12-15 minutes).
Add the ginger-garlic paste and sauté for 2 minutes until raw smell disappears.
Grind the soaked cashew nuts into a smooth paste with a little water and keep aside.
Add the chopped tomatoes to the pan. Cook until soft and oil begins to separate (about 8 minutes).
Stir in coriander powder, cumin powder, red chili powder, turmeric powder, and salt. Cook the masala for 2 minutes.
Add the chicken pieces and stir well to coat with the spice mixture. Cook for 5-7 minutes until the chicken begins to brown.
Lower the heat and add the whisked yogurt, stirring continuously to prevent curdling.
Add the cashew paste and mix well. Pour in 150 ml water, stir, and bring to a gentle boil.
Cover and simmer on low heat for 25-30 minutes or until the chicken is tender and cooked through.
Sprinkle garam masala and mix well. Cook uncovered for another 5 minutes to thicken the gravy if needed.
Garnish with fresh coriander leaves before serving.
