When it comes to cheese, more is less.
Heat oil in a a large pot and add in onion. Fry for about a minute on medium flame without letting them turn brown.
Add chicken to the pot and stir well. Let cook till all the water dries up. Keep stirring at regular intervals to avoid browning.
Add garlic powder, salt, white pepper and black pepper. Stir well.
Pour in milk and cook on low flame for about three minutes.
Add shredded cheddar; stir for few seconds till mixture looks like thick sauce. If needed you can add some more milk.
Add boiled pasta, mozeralla and capsicum to the pot and quickly stir well to coat pasta well with the sauce.
Add parmesan cheese, cover the pot and lower the flame to simmer. Let simmer for 5 minutes.
Turn the flame off. Remove the lid after 5 minutes. Serve hot, sprinkled with ground nutmeg.