Fry the potatoes to a golden brown colour and set aside.
Heat 2 tbsps oil and fry onion, ginger, garlic and chillies till soft. Put in the dal and all the spices for the kofta along with salt and cook till dry and slightly brown. Remove from fire and set aside.
Grind paneer to a paste, mix in flour and salt and knead to a smooth mixture.
Form the mixture into small balls around dal mixture. Deep-fry over a slow fire to a golden brown colour, drain and set aside.
Heat 2 tbsps oil and put in cumin seeds and bay leaves, when the seeds stop popping, put all the remaining spices and fry briefly.
Put in tomatoes, curds, sugar and salt and cook till the oil floats to the top, mix in the potatoes and cover with water.
Cook till the potatoes are soft, then put in koftas, raisins and cashewnuts and simmer over a gentle fire for 5 minutes.