Heat 2 tablespoons oil in a non-stick pan. Add cumin seeds and sauté till the seeds are well browned.
Add curry leaves and when they crackle, add tomato. Mix well and sauté for a minute.
Add turmeric powder, red chilli powder, pav bhaji masala, garam masala powder and coriander powder. Mix well and add salt and sugar. Mix well and cook on low heat till the oil separates.
Add 1½ tablespoons chopped coriander and cashew nuts. Mix well and cook for 2 minutes. Remove from heat and grind into a smooth paste.
Heat 1 teaspoon oil in a non-stick pan. Add capsicum and sauté for a minute. Lower heat and add ground paste. Mix well and cook till the oil separates.
Add cottage cheese cubes, mix gently and cook for a minute.
Garnish with chopped coriander and serve hot.