Heat a splash of olive oil in a cooking pot over moderate heat.
Saute the onion and garlic until golden.
Pour in the crushed tomatoes, the hot water or stock, the bay leaf, smoked paprika, and season with salt and pepper.
Simmer the sauce partly covered over moderate heat until thickened. Meanwhile, prepare the eggplant.
Slice off the tops and bottoms of the eggplant. Cut it in half and then into 2½-3 cm (1-1¼ inch) thick slices.
Generously coat the bottom of a frying pan with olive oil. Heat over high heat.
Pan-fry the eggplant slices until deep golden, lightly browned on each side. Only the outer part should soften because the eggplant will cook in the sauce as well. NOTE: Pan-fry in batches, adding more oil before cooking the next batch as necessary. Eggplant soaks oil like a sponge.
Add the pan-fried eggplant to the cooking pot with the thickened sauce.
Cook covered, over moderate heat for about 20 minutes until the eggplant softens. If necessary, add a splash of water.
Stir in the dried oregano, parsley, feta, and Kefalotyri cheese. Turn off the heat and leave the pot on the hot stove for a minute or two until both cheeses soften and melt.
Serve warm with plenty of crusty bread for dipping.