We ate this last night and I have to say, it was damn good. This is an experiment that worked. Mostly, I think, because it only marginally varied from tried-and-true aloo-shimla mirch sabzi.
You need: 2 medium-sized potatoes, diced; 2 medium-sized bell peppers (capsicums), diced; 2-3 curry leaves; 2 dried red chili; 1 tsp jeera (cumin seed); 1/2 tsp each of turmeric, red chili powder, and ground coriander; 1/2 tsp poppy seeds; 1/2 tsp urad dal; 1/2 a small onion, finely chopped; salt to taste; 3 tbsps oil
How to: Heat the oil in a stockpot. Add (in this order): cumin seeds, dried red chili, curry leaves, urad dal, turmeric, red chili powder, coriander powder. Stir. Add onion and let it cook for less than a minute. Add the potatoes and salt. Add the poppy seeds. Stir well. Give it the occasional stir and let it cook for 2-3 minutes. Add the peppers, sprinkle a little water over the top, stir well, and cover. Open now and again and give it a stir. Cook till the potatoes are done to your satisfaction.
Edit: Okay, I know most people might not have poppy seeds (khus-khus?) in their kitchen, and it’s really optional. But if you have them, they add a wonderful and subtle flavor.

[...] Potato is “Aloo”. So, here is a Sookha Aaloo Simla Mirch Recipe (Sookha=dry) and a Aloo-shimla mirch sabzi. I liked this dish so much I actually asked for seconds. *blush* Next came a delicious Mutter [...]
hello can you fry shimla mirch??
hi gurj – sorry i didn’t see your comment at all. yes, you certainly can fry shimla mirch. it tastes very good in Kadhai Paneer, when cut into long slices and shallow-fried with the onion before adding paneer pieces.