To make the kofta, combine all ingredients except sugar in a bowl and mix well then form into 1 ½ tablespoon balls.
Heat oil in a large saucepan to 160°C. fry the kofta several at a time until golden. Set aside on paper towel to drain.
Heat 1 tablespoon oil over medium heat in a large saucepan. Add in the bay leaf, cinnamon, cardamom, mace and cloves. Fry stirring regularly for 1 ½ minutes.
Add the onion paste and fry until browned, 5-6 minutes. Add in the ginger, garlic and ground spices then sauté for 1 minute or until fragrant.
Stir in the tomato paste and sauté for 2 further minutes. Add in the remaining ingredients then simmer for 20 minutes or until slightly thickened.
Just before serving, add the kofta and gently stir through the gravy. Serve over basmati rice.