Add the thinly sliced onions, cashew nuts, and other whole spices (bay leaf, whole red chilies, green cardamom, whole cloves, cinnamon stick and black cardamom) to a pan. Add the water and let it come to a boil on high heat.
Once boiling, reduce the heat to medium, cover, and let the spices cook until the cashews are soft and the onion has changed its color, about 5-7 minutes.
Transfer the onion mixture out of the pan and let it cool a little. Add a few ice cubes to fasten the cooling process. Once cool enough to handle, blend the mixture in a blender until smooth.
In a pan, melt the butter at low heat and add the green chili, ginger, and garlic. Saute until ginger and garlic are no longer raw, about 4-5 minutes.
Add the tomato puree and saute until the puree changes color to a rusty red and you can no longer smell the rawness in the tomatoes. This step is crucial and needs some patience because we are not frying the tomato puree in a stick of butter.
Once the tomato puree is cooked, pour the onion mix through a fine mesh sieve into the pan and mix well.
Add the remaining chickpea flour and red chili mix, sugar, salt (adjust to taste), garam masala, and fenugreek leaves to the pot. Let the sauce come to a boil.
Add the chicken tikka to the sauce and mix well. Wait until the sauce is boiling again, cover the pan, and let it all cook together for 5-7 minutes at medium heat.
Butter chicken is ready once chicken is cooked through (165° F). Enjoy with a side of your choice!