Set a skillet or Kadai over medium high heat. Add about 1 tbsp oil. When the oil becomes moderately hot gently throw in the diced capsicums or shimla mirch and saute for about 1-2 mins. Set them aside.
Add the rest of the oil in the same Kadai or skillet. When the oil becomes moderately hot throw in the whole cumin seeds, bay leaves and dry whole red chilies. Allow them to sizzle just for a few seconds.
Now, add the chopped onion and fry until just beginning to turn golden around the edges.
Immediately add the ginger garlic paste and fry well until the raw smell completely disappears.
Next, add the tomato paste and the dry spices ( add the garam masala powder 1/2 the quantity, the rest will be used as garnish). Fry the masala well until you see streaks of oil appearing. Add salt too.
Now, add the sliced tomatoes and fry well until the tomatoes become mushy and oil begins to ooze out. You will notice that the color of the bhuna masala will darken at this stage.
Add the ginger and chilies and mix well with the Bhuna Masala.
Now, add the boiled and diced potatoes and the shallow fried capsicums. Roast them well with the bhuna masala for about 5-6 mins.
Turn of the flame and add the crushed kasturi methi and the left over garam masala powder. Give the Aloo capsicum curry a good mix and serve hot with Chapathis, pooris, parathas or rice.