Heat the mustard oil in a large pan over medium heat until it begins to smoke slightly.
Add the cumin seeds, bay leaves, cloves, cardamom pods, and cinnamon stick. Sauté for about 1 minute until fragrant.
Add the finely chopped onions and sauté until golden brown.
Add the ginger and garlic pastes, and cook for another 2-3 minutes until the raw smell disappears.
Add the turmeric powder, coriander powder, and red chilli powder. Cook for 1-2 minutes, stirring continuously.
Add the pureed tomatoes and cook until the oil starts to separate from the masala, about 5-7 minutes.
Add the chicken pieces and green chillies, stirring well to coat the chicken with the masala. Cook for about 10 minutes, stirring occasionally.
Add the water and salt, bringing the mixture to a boil. Reduce the heat to low, cover, and simmer for 20-25 minutes, or until the chicken is tender and the gravy has thickened.
Sprinkle garam masala powder over the chicken and mix well. Cook for another 2 minutes.
Garnish with fresh coriander leaves before serving.
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