The Motor Vehicles Act, 1988

159. Production of certificate of Insurance on application for authority to use vehicle.

A State Government may make rules requiring the owner  of any  motor vehicle when applying whether by payment of a tax or otherwise for authority to use the vehicle in a public place to produce such  evidence as  may be  prescribed by  those rules  to  the effect that either-

1. on  the date when the authority to use the vehicle comes into operation  there will  be in  force the  necessary policy of insurance in  relation to the use of the vehicle by the applicant or by other persons on his order or with his permission, or
2. The vehicle is a vehicle to which section 146 does not apply.