Warm the oil in a deep pan over medium heat, then add the bay leaf or curry leaves, cloves, cinnamon, and green cardamom. Stir until the spices smell fragrant and the oil takes on their aroma without letting them burn.
Add the finely chopped onions and slit green chilies, then cook for 7 to 8 minutes. Keep stirring until the onions turn a deep golden brown and look soft rather than crisp.
Stir in the ginger garlic paste or minced ginger and garlic, and cook for about 1 minute. The sharp raw smell should fade into a warm, savory aroma.
Add the tomatoes, turmeric powder, and salt, then cook the mixture until the tomatoes break down. The pan should hold a soft, thick paste with no firm pieces of tomato remaining.
Lower the heat and stir in the yogurt or cashew mixture, Kashmiri red chili powder or smoked paprika, garam masala, and coriander powder. Mix steadily so the dairy or cashew mixture blends smoothly into the tomato base.
Keep the heat low and cook the spice mixture until it smells rounded and fragrant. Look for small droplets of oil separating around the edges of the thick masala.
Add the chicken and chopped coriander or mint leaves, then fry over medium heat for about 3 minutes. The chicken should lose its raw pink color and turn pale or opaque on the outside.
Cover the pan and cook over low heat for 3 to 4 minutes. This brief covered cook lets the chicken take on the flavor of the spiced onion mixture before liquid is added.
Heat 1 cup water in a separate pot while the chicken cooks. Use hot water so the pan keeps a steady simmer when the gravy is loosened.