This Punjabi dish, with some variation in spices, is eaten over all of
northern India. Paneer is a fresh milk cheese with an interesting,
slightly chewy consistency. It's easy to make, but requires planning
ahead. You can substitute a diced 6- or 8-ounce cake of pressed tofu
for it in this recipe.

DIRECTIONS: =========== Put the chopped onion and ginger into the
container of an electric blender or food processor along with 1/3 cup
water and blend until you have a smooth paste. Leave paste in the
blender container.

Heat the oil in a heavy, 10-inch-wide pot (preferably teflon-lined)
over a medium flame. When hot, put in the pieces of paneer (or tofu)
in a single layer and fry them until they are golden brown on all
sides. This happens pretty fast. With a slotted spoon, remove fried
paneer to a plate. Put the dried red pepper into the same oil. Within
2 seconds, turn the pepper over so that it browns on both sides. Now
put in the contents of the blender (keep your face averted as the
paste might splatter). Fry, stirring constantly, for 10-12 minutes,
or until paste turns light brown. Add the coriander and turmeric and
fry, stirring, for another minute. Put in the minced tomatoes. Stir
and fry for another 3 to 4 minutes or until tomatoes turn a dark
reddish brown. Now pour in 2 cups of the whey (or water if you're
using tofu). Add the salt and the black pepper. Mix well and bring to
a boil. Cover, lower heat, and simmer gently for 10 minutes. Lift
cover and put in the paneer pieces and the peas. Cover and simmer for
10 minutes or until peas are cooked.

[Photo Source-http://christiescorner.com/2009/10/26/matar-paneer/]