Soak the cashews in 1/2 cup boiling water and set aside.
Soak peas in 1 cup of water and microwave them for 6-8 minutes until they are cooked.
Heat oil in a kadhai or wok over medium-high heat. Add mushrooms and saute them till they have reduced in size and start oozing out water (~8-10 minutes). Transfer the mushrooms to a plate and set aside.
Add the chopped onion slices and fry them till they soften (approximately 10-12 minutes). Add garlic cloves and ginger and fry them for a minute or two.
While the onions are frying, grind the cashews and green chili to a fine paste.
Add the ground paste to the onions (once the onions are done) and fry them for another 5-6 minutes.
Add the pureed tomatoes, salt, garam masala, coriander powder, cumin powder, chili powder, and sugar, and mix well. Continue to cook for another 10-12 minutes till the tomatoes get mushy and the oil starts to surface.
Add the mushroom and peas back to the wok and cover the wok and let it simmer for another 5 minutes.