Select sauté on the instant pot and adjust to normal. Add oil to the pot.
When the oil is hot, add asafoetida, cumin seeds, cloves, bay leaf, and whole black cardamom pod. Stir and let it sauté for a few minutes.
Add ground turmeric, ground ginger, ground fennel, ground cumin, salt and stir.
Then add water. Stir well so that the spices are well mixed in the water. Add paneer and peas. Stir gently.
Press cancel. Seal the pot and select manual/high pressure for 3 minutes.
When cooking is complete, use quick pressure release to depressurize. Open the lid and select sauté, add milk and garam masala. Add the slit Serrano peppers. Let it sauté for 2 to 3 minutes until it comes to a boil. This dish is meant to be soupy. You can continue to sauté until you reach the consistency you desire. I typically do not sauté if for very long.
Transfer in a serving bowl. Discard the bay leaf. Serve over steamed rice.