In a bowl, add 1 cup water and ½ tsp turmeric powder; keep aside.
Grind the cumin and fennel seeds to a fine powder
Heat 1-2 tsp mustard oil in a pan and add the paneer cubes. Fry lightly on all sides and transfer to the bowl with turmeric water.
In the same pan, heat the remaining oil and add the whole spices (bay leaf, star anise, cloves, cardamom and cinnamon). Fry on low heat till fragrant and then add the ground cumin and fennel powder, ginger powder, asafoetida and green chillies. Mix well and add the paneer cubes along with the water.
Bring to boil and then lower heat; add 1 ½ cup milk, season with salt and simmer on low heat for 5-7 minutes. Add more milk if necessary.
Remove from heat and garnish with chopped coriander leaves.
Notes
Frying the paneer cubes is optional. There is also a version of this dish in which the paneer pieces are simply soaked in turmeric water and added directly to the spices without frying first. So it’s entirely upto you based on your taste preferences.