In a blender, add the ingredients for the onion paste and blend until you get a thick paste. Put it aside.
Heat a pan on medium heat, add the oil. Add cumin, bay leaf, cinnamon, cardamom, cloves. Saute the spices until the flavors spread. Remove the whole spices from the oil.
Lower the heat and add the onion paste. Saute until it thickens and becomes golden.
Add tomato puree, turmeric, chili, coriander, Garam Masala and mix. Cook, stirring for another 3-5 minutes.
Add the mushrooms over the masala mixture. Cook, stirring, for another 3 minutes.
Add a cup of water and mix. Cover with a lid and let it cook on low heat for 20 minutes.
Add the yogurt or coconut cream and cook on low heat for 3-5 more minutes.
Sprinkle with parsley and serve with warm rice.