Soak the cashews in cold water for at least 4 hours, preferably overnight. Once completely soft, drain the water and using a stick blender, blend until you have a smooth paste. Add a few drops of water if the cashews are a bit too firm to completely blend. Set aside.
In a large bowl, roughly mash the potatoes. Add the paneer, flour, ground almonds, garam masala and coriander with a good bit of seasoning, and bring together with your hands until completely combined and dough like. Break off into 12 pieces and roll into balls/koftas.
Prepare a large plate with kitchen towel. Using a large, deep pan, heat the vegetable oil to 82C/180F. Add four of the koftas and fry for 2 minutes on each side, until golden brown. Carefully transfer to the lined plate. Repeat the frying with the remaining koftas. Set aside the koftas and keep warm.
In a mini blender, blitz together the shallots, ginger and garlic cloves until you have a paste. Heat a tablespoon of the oil in a large pan over a medium heat and add the cinnamon, bay leaves and cloves, cooking them for 1 minute until aromatic. Add the onion paste, lowering the heat, and cook for 3 minutes, stirring often. Add the ground spices and cook for another 1 minute.
Add the passata and sugar and stir to combine. Add the cashew paste along with 300ml of water and a good pinch of salt and stir until completely combined and smooth. Simmer for 10 minutes uncovered, adding a little more water if the sauce gets too thick. Once the sauce is done add the koftas, sprinkling over a few bay leaves, to serve.
Tip: you can also serve this dish with chutney and poppadoms