In a large pot, over medium heat, saute stew beef with a little bit of oil. Once meat browns, add water. Bring to boil over medium-high heat and reduce heat to medium-low. Add bay leaf and thyme, cover (leave a little crack for steam to escape) and cook on medium-low to low heat, stirring occasionally, for about an hour and a half, until meat is tender.
Take out bay leaf and discard.
In a separate cooking pan, heat up olive oil and add onions, mushrooms and peppers. Season with a little bit of salt and pepper and saute over medium heat until starts to golden. Sprinkle flour over veggies and mix well.
Add veggie to the pot with beef and stir. Add pressed garlic. Add salt and pepper to taste. Cook for 5-7 minutes.
Stir in heavy cream and shredded cheese. Continue to stir slowly until cheese is melted. Take off heat.