Wash the Chillies, make a slit on only one side to make a pocket and remove the seeds from the chillies.
Boil around 3 medium cups water in a vessel, when water is boiling add the chillies, and boil for 2 mins. Drain the chillies and keep them upright in a strainer so that all the water from the chillies drains off.
Heat a pan on medium low heat,dry roast the peanuts first, till brown spots appear on them. Keep them aside
Next dry roast sesame seeds, coriander seeds, cumin seeds and fenugreek seeds separately. Do not burn them while dry roasting, it will give bitter taste to the curry.
Grind the peanuts, sesame seeds, coconut, coriander, cumin and fenugreek seeds together adding water to a smooth paste
To this add fried onions, ginger garlic paste, turmeric, redchilli powder and grind again.
Heat a nonstick pan on medium heat, add oil.
When the oil is ready add mustard seeds, cumin seeds, curry leaves, bay leaves.
Now add the cooked chillies (from step 2 ) and asafetida, mix well.
Add the ground masala, mix well again. Reduce the heat to medium low, cover and cook for around 10 mins mixing in between. Add little water if masala sticks to the bottom.
Squeeze the juice from tamarind, pour it into the curry and mix. Add water as per the required consistency of gravy. Now add the salt and sugar. Cook for 10 more mins on medium low heat, at the end add fresh coriander leaves and turn off the stove.
Serve hot with any Biryani, ideal for hyderabadi mutton or chicken biryani or baghara rice. Note: Step 1 & 2 removes hotness from the chillies. Apply oil to hands while removing seeds from chillies, this will not burn hands while removing the seeds.