Section 206 in the Indian Motor Vehicles Act (1988)

Section 206 details the power of police officer to confiscate any vehicle-related document

1. Every traffic police officer or any official with authorization on behalf of the State Government shall take hold of the vehicle/ mark/ related document in his/ her jurisdiction as well as summon the driver or vehicle owner to take responsibility for the same under the following conditions.
   1. he finds any evidence to prove that one or more identification mark (like number place or make) on a particular motor vehicle is fake, false or not approved as specified in the section 464 of the Indian Penal Code of 1860 (45 of 1860).
   2. the license, permit, registration certificate, insurance papers or any other mandatory document shown by the driver or owner of the vehicle is false, expired or fake as forbidden in the Indian Penal Code, 1860 (45 of 1860), section 464.
2. Every traffic police officer or any other official with authorization on behalf of the State Government shall take the driver into custody under the following conditions:
   1. the driver or owner of the vehicle is charged with any transgression mentioned in the Act might run off or try to circumvent the summons.
   2. the officer has the power to confiscate the license held by the offender and pass it into the Court of law taking knowledge of the said offence.
   3. the Court can, at its discretion, on the appearance of driver give back the license to him/her while demanding a provisional acknowledgment specified under the sub-section (3).
3. Every traffic police officer or any official with authorization to seize a driving license as per the reasons mentioned in the sub-section (2) of the Article 206 shall provide the offender a temporary acknowledgement. This is mandatory as it is not only proof for the fact that your license is seized, but will also enable you to drive until the license is returned to him. The dates of confiscation and return can be mentioned in the acknowledgment slip. But this is applicable only if the Magistrate, traffic police officer or any other authorized state government official sees it fit to return based on the offence and damage incurred. They also have the power to extend the term of confiscation. In some cases, license may also be cancelled by the court.