In a medium size pot bring water and milk to the boil over medium to high heat. Stir occasionally so the milk does not burn.
Reduce heat and then add sugar, bay leaf, cardamom pods, and soaked rice. Allow to boil for 3 to 4 minutes. Stir regularly so that the mixture does not burn or the rice sticks to the pot.
Cook until the rice is soft but is not mushy. The rice should be firm on the outside and soft on the inside once cooked. It could take 20 to 25 minutes to cook (more or less depending on how long you soaked your rice for).
Remove from heat and serve.
Notes
If you find your liquid is rising when you are cooking, reduce the heat slightly.
Soak your rice for 4 to 6 hours. Do not soak your rice overnight, or it could become mushy and oversoaked.