Gather your ingredients together.
Make your ginger paste.
Add 1/2 inch ginger & 3-4 small garlic cloves and crush in a mortar and pestle.
Wash the tomatoes and chop them up into chunks, then with a blender or grinder, make a smooth puree and set aside.
In a large skillet melt the butter on medium heat.
Add the bay leaf and sauté for a few seconds till aromatic.
Add the crushed ginger-garlic paste and sauté until the aroma of the ginger-garlic goes away.
Add the tomato puree mixture to the skillet.
Add the chili powder and sauté on a low flame for 15 minutes, stirring often.
Simmer till the sauce thickens, this will take about 7 to 8 minutes on a low flame.
Add the green chilies and ginger, stir then simmer for a few minutes.
Add the honey, salt and crushed kasuri methi/dry fenugreek leaves.
Stir and then add the paneer cubes and simmer for 2 to 3 minutes till the paneer cubes are heated through.
Add the cream and gently stir, remove from heat and sprinkle with garam masala and stir again.
Serve the paneer makhani with rice or naan bread. Enjoy!