Yes, traffic police can seize certain vehicle documents, but only in specific circumstances prescribed by the Motor Vehicles Act, 1988.
Under Section 206, an authorised police officer may seize a driving licence if the driver is charged with certain offences and there is reason to believe the driver may avoid service of a summons. In specified serious traffic offences, the licence can also be forwarded to the licensing authority for disqualification or revocation proceedings.
Police may also seize documents such as the registration certificate, insurance certificate, permit, or licence when there is reason to believe that the document is false.
Additionally, under Section 207, an authorised officer can detain a vehicle being used without a required registration, driving licence, or permit. In certain cases, the registration certificate itself may be seized instead of detaining the vehicle.
Therefore, traffic police cannot arbitrarily seize your vehicle documents for every traffic violation. The seizure must have a legal basis, and where a document is seized, the applicable procedure and acknowledgment should be followed.
