In a pan, heat 2 tbsp butter and 1 tbsp oil. Now add Kashmiri red chili powder.
Transfer the yellow onions, sauté for 2 minutes, and cover them with a lid for 3 minutes.
Next, add green bell peppers, mix, and cover them with a lid for 3 minutes.
Add pav bhaji masala and sauté for a minute.
Transfer the tomato puree and mix, add 1.5 tsp salt, 1 tbsp butter, mix it well, and cover the pan with a lid.
Let the tomato puree cook well for about 10-12 minutes on low heat stirring halfway through.
Next, combine the mashed veggies to the tomato puree, ½ - ¾ th cup water, 1 tbsp butter, and mix. Taste the bhaji at this point and adjust the water consistency and salt according to your wish.
Cover the pan with a lid. Let the bhaji cook well for about 10-15 minutes on low heat stirring in between. Taste the bhaji at this point and adjust the consistency and salt according to the taste.