In a bowl, combine chicken with all of the ingredients for the chicken marinade; let marinate for 10 minutes to an hour (or overnight preferably)
Heat oil in a large skillet or pot over medium-high heat. When sizzling, add chicken pieces in batches of two or three, making sure not to crowd the pan. Fry until browned for only 3 minutes on each side. Set aside and keep warm. (You will finish cooking the chicken in the sauce.)
Melt the butter in the same pan. Fry the onions until soft (about 3 minutes) while scraping up any browned bits stuck on the bottom of the pan.
Add garlic and ginger and sauté for 1 minute until fragrant, then add garam masala, cumin, turmeric and coriander. Fry for about 20 seconds until fragrant, while stirring occasionally.
Pour in the tomato puree, chilli powders and salt. Let simmer for about 10-15 minutes, stirring occasionally until sauce thickens and becomes a deep brown red colour.
Stir the cream and sugar through the sauce. Add the chicken and its juices back into the pan and cook for an additional 8-10 minutes until chicken is cooked through and the sauce is thick and bubbling. Pour in the water to thin out the sauce, if needed.
Garnish with coriander and serve with fresh, hot basmati rice and naan bread.