This paneer casserole builds up in three layers inside a single baking dish. Sautéed mushrooms go in first, then blanched capsicum strips, and finally a mixture of chopped paneer, soaked breadcrumbs, eggs, milk and prepared mustard. The oven takes it from there, baking everything at 175°C for 30 minutes until the top is set and lightly coloured. No heavy sauce, no deep frying. If you enjoy dishes like Stir Fried Paneer with Mushrooms and Peas, this casserole uses a similar combination of ingredients in a very different format.

About the Recipe
The recipe moves through three stages: cooking the mushrooms, blanching the capsicum, and mixing the paneer layer.
Sautéing the mushrooms until all the released water has evaporated keeps the base from turning watery in the oven. Blanching the capsicum briefly and then cooling it under cold running water stops the strips from going soft and dull during baking.
Soaking the breadcrumbs in the warm egg and milk mixture for ten minutes before the paneer goes in is what gives the top layer its firm, sliceable structure once baked.
Why You Will Love This Recipe
The paneer and breadcrumb mixture sets firmly in the oven, so you can cut the casserole into neat portions at the table. That makes it genuinely practical when you are feeding more than a couple of people.
The prepared mustard adds a quiet sharpness to the paneer layer that stops the dish tasting flat, even though the ingredient list is short.
It is also one of the few paneer dishes you can fully assemble before guests arrive and simply slide into the oven when needed.
Cooking Tips
Do not rush the mushroom step. If you drain them before the water has cooked off, the base of the casserole will be wet and the layers will not hold together.
Warm the milk before beating in the eggs so the mixture combines smoothly. Let the breadcrumbs soak for the full ten minutes before adding the paneer.
Grease the baking dish well so the set casserole releases cleanly when you go to serve it.
Top Tips
- Sauté the mushrooms until the pan looks dry before spreading them in the baking dish. Any remaining liquid will make the base soggy.
- Blanch the capsicum for only as long as it takes the water to come to the boil, then cool immediately under cold running water to keep the colour and slight bite.
- Warm the milk before adding the whisked eggs. Cold milk can make the mixture uneven and harder to combine.
- Let the breadcrumbs soak in the egg and milk mixture for the full ten minutes before adding the paneer. Rushing this step gives an uneven texture after baking.
- Chop the paneer into small, even pieces so they distribute through the top layer without creating large gaps.
- If you are preparing ahead, the assembled casserole can sit at room temperature for up to an hour before baking. Avoid refrigerating it assembled, as a cold dish will need a longer time in the oven.
Serving and Storing Suggestions
Serve the casserole straight from the baking dish with coleslaw and fresh bread rolls as the recipe suggests. Let it rest for five minutes out of the oven before cutting so the layers hold cleanly.
Leftovers can be covered and refrigerated for up to a day. Reheat individual portions in a pan over low heat or in an oven set to 150°C until warmed through. The texture stays firm after reheating, though the base may soften slightly.
Similar Recipes
- Stir Fried Paneer with Mushrooms and Peas
- Paneer Capsicum Masala
- Grilled Paneer
- Mushroom Paneer Sandwich
Nutrient Benefits
Paneer is a good source of protein and calcium. Eggs add further protein and help the top layer set firmly. Button mushrooms provide B vitamins and some dietary fibre. Capsicum contains vitamin C, much of which is preserved by the brief blanching used here. Together, the main ingredients make this a reasonably protein-rich option for a vegetarian meal.

Paneer Casserole
Ingredients
- 100 gms Button Mushrooms
- 2 tblsp Butter
- 1 small Green Capsicum
- 3 Eggs
- 150 ml Milk
- 1/4 cup Soft Breadcrumbs
- 400 gms Paneer
- 3/4 tsp Salt
- 1/2 tsp, freshly ground Black Pepper
- 1 tsp Prepared Mustard
Instructions
- Wash the mushrooms and chop them.
- Heat the butter in a frying pan over low heat.
- Saute the mushrooms lightly until the water released by them has evaporated.
- Drain the mushrooms and spread them in a greased baking dish.
- Cut the capsicum in half.
- Remove and discard the inner pith and seeds.
- Cut the capsicum into narrow strips.
- Place the capsicums in a pan with cold water over high heat.
- Bring to the boil and remove from heat immediately.
- Drain off the water and place under running cold water until cook.
- Reserve a few pieces of capsicum for garnish and chop the rest roughly.
- Spread the chopped capsicum over the mushrooms in a baking dish.
- Break the eggs in a bowl and whisk until well blended.
- Warm the milk and beat the eggs into the milk.
- Pour the milk mixture over the breadcrumbs in a bowl and set aside for 10 minutes.
- Chop the paneer and add it to the breadcrumb mixture along with the salt, pepper and mustard.
- Spread the mixture over the capsicums in the baking dish.
- Garnish with the reserved strips of capsicum and set aside until serving time.
- Set the oven temperature to 175C.
- Place the casserole in the preheated oven for 30 minutes.
- Serve the casserole with coleslaw and fresh bread rolls.
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Frequently Asked Questions
Can I make this casserole without eggs?
The eggs bind the paneer and breadcrumb layer and allow it to set firm in the oven. Leaving them out gives you a loose topping that will not hold together when sliced. If you need an egg-free version, a thick mixture of cornflour and milk can work as a partial substitute, but the finished casserole will be noticeably softer and less structured.
What is prepared mustard and can I substitute it?
Prepared mustard means ready-made mustard paste sold in jars, not dry mustard powder. Yellow mustard or Dijon mustard both work here. If you only have dry mustard powder, use about half a teaspoon mixed into the milk before adding the eggs. The mustard adds a mild sharpness to the paneer layer, so try not to leave it out entirely.
Why does the recipe ask you to blanch the capsicum instead of using it raw?
Raw capsicum releases water as it bakes, which can make the middle layer wet. Blanching briefly and cooling under cold water removes some of that moisture while keeping the capsicum from going completely soft. It also takes away the slightly raw edge in flavour that capsicum can have when baked for only 30 minutes.
My casserole top looks set but the inside feels soft. Is it cooked?
A slight softness in the centre is normal just out of the oven. Let the casserole rest for five minutes before checking again. If the centre still looks liquid rather than soft and set, return it to the oven for another five to ten minutes. A very deep baking dish or an overfilled dish can extend the time needed.
Can I add other vegetables to this casserole?
You can, but stick to vegetables with low water content or cook off their moisture first. Corn kernels, finely chopped cooked carrot or blanched broccoli florets work reasonably well. Avoid adding tomatoes or zucchini raw, as they release a lot of water during baking and will make the layers wet and difficult to slice.