Take cubed paneer in a bowl, add hot water over it and let it sit till needed.
In a pan, take onion and other ingredients given for grinding. Cook that for 10 mins. Now cool this and take it in a blender. Puree till smooth. Set aside.
Heat oil in a kadai. Add in whole spices and saute for a min.
Add in pureed onion mix and cook till it thickens.
Add in chilli and garam masala powder and give a good mix.
Pour whisked yogurt and mix well. Cook for few mins.
Add in water and bring it to a boil. Add in drained paneer and simmer for few mins.
Add in salt, sugar and cream to taste and mix well.