Heat oven to 400°F. Grease 2-quart glass casserole with butter or cooking spray.
In medium bowl, stir together 1 1/4 cups flour, 1/3 cup sugar, the baking powder, salt and nutmeg. Cut in butter, using pastry blender or fork, until mixture looks like coarse crumbs. Stir in milk just until combined; set aside.
In 2 1/2-quart saucepan, stir together 3/4 cup sugar and 2 tablespoons flour. Stir in blueberries, raspberries, peaches, lemon peel and lemon juice. Heat to boiling over medium-high heat, stirring constantly. Spoon fruit mixture into baking dish.
Immediately drop biscuit dough by 8 spoonfuls onto hot mixture. Sprinkle sugar crystals over dough.
Bake 25 to 35 minutes or until biscuits are golden brown. Cool at least 15 minutes before serving.