Cut all fat and gristle off the meat, and pound each steak out with a meat tenderizer until they are thin but not tearing. In a shallow bowl, combine flour, bay leaf, salt and pepper. Dredge steaks in the flour mixture until evenly coated.
Heat 1 tablespoon olive oil in a large heavy skillet over medium heat. Saute onions until soft and translucent. Stir in mushrooms and garlic, and cook until tender. Remove from skillet and set aside. Heat remaining oil, and fry each steak for 2 minutes on each side, or until golden brown. Return onion mixture to skillet. Stir in gravy and milk. Reduce heat, cover, and simmer for 30 to 40 minutes. Stir occasionally to prevent sticking.