In a large, heavy-bottom skillet, heat ghee over medium-high heat.
Add cumin seeds and bay leaf. When the cumin seeds splutter add in ginger garlic paste and serrano pepper and let is sauté for 30 seconds.
Add in pureed tomatoes and cook on medium heat for 4 to 5 minutes. Keep stirring intermittently. Further add in ground turmeric, Kashmiri chili powder, ground coriander, and ground cumin. Furthermore, stir intermittently.
Add in whisked yogurt and water and keep stirring continuously until the mixture comes to boil. This is key. You need to whisk the yogurt at room temperature, make sure there are no lumps and after adding to the pot keep stirring. Further add in the boiled potatoes and cover. Let it cook on medium heat for 3 to 4 minutes until the potatoes absorb the spices.
Finally add in garam masala, salt, and Kasuri methi. Top off with cilantro. Turn off the stove and serve with roti, naan or rice.