Heat oil in a large frying pan over medium heat. Add onions, and saute until crispy and golden brown. Drain on an absorbent towel. Leave to cool. Once cooled, crush the onions lightly. Set aside.
Mutton Korma:
To the same pan, add mutton. Increase the heat to high. Saute for 5-6 minutes or until the mutton pieces are lightly browned. Stir in ginger, garlic and green chilies. Fry again for 2 minutes or until aromatic. Now add cinnamon, cloves, bay leaf and cardamom pods. Saute for a minute. Add turmeric, coriander and red chili powder. Saute for a minute.
Add yogurt, crushed onion and coriander leaves. Season with salt. Stir in 1 cup water. Cook, covered, for 25-30 minutes or until mutton pieces are cooked through. Add more water if necessary. Add garam masala and heat through.