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Preheat oven to 400°. In a large skillet, heat butter over medium-high heat. Saute onions and add garlic about a minute before done cooking.
In a small bowl, whisk flour, milk, salt and pepper; stir into vegetables. Bring to a boil, stirring constantly; cook and stir 2-3 minutes or until sauce is thickened. Quickly add in peppers and zucchini to mix and spoon into a greased 8-in. square baking dish.
For topping, in a small bowl, whisk flour, baking powder and salt. Cut in butter until mixture resembles coarse crumbs. Stir in cheese and basil. Add milk; stir just until moistened. Drop by rounded tablespoonfuls over filling. Bake 25-30 minutes or until filling is bubbly and biscuits are golden brown.