Cut paneer and capsicum into ½ inch cubes. Chop tomatoes and green chilies and mince garlic.
Heat the oil in a frying pan and add the whole cumin seeds.
After the cumin seeds crack, add the minced garlic and fry for 1 minute.
Add the cubed onions and chopped green chilies and fry till the onions are translucent in color.
Add the chopped tomatoes, coriander powder, cumin powder, turmeric powder, red chili powder garam masala powder, sugar and salt.
Cover and cook on a low flame till the tomatoes are pulpy. Approximately8 - 10 minutes.
Add the cubed capsicum and cook for 3 - 4 minutes. The capsicum should be crisp.
Add the cubed paneer pieces and mix well so that the paneer is coated with the masala.
Garnish with coriander leaves and serve.