Heat the oil in a large saucepan and brown the meat. Remove the meat pieces from the saucepan, add onion and garlic and saute them for 2'-3'. Put the meat back in the saucepan.
Add the tomatoes, peeled and grated, and stir. Put salt, pepper, the bay leaf, sugar and some nutmeg, if you like it. Add a cup of water and stir again.
Simmer over a low heat for 1½ hour until the water has evaporated and the meat is left in the sauce. Add some water in the meanwhile if needed. Serve the veal with fresh fried potatoes.