NOTE THAT:

A traffic policeman in uniform has the right to demand your drivers licence and inspect your vehicle documents. He may impound your licence if he should so judge it necessary.
If a traffic policeman gives you instructions on the road, it is your duty to obey them regardless of what the electronic traffic signals say. When a traffic policeman is stationed at a signal/crossing, he is the final authority.
If you cannot find your vehicle, it is likely that it may have been towed rather than stolen. Ask around, local shopkeepers are normally informed about local traffic stations where impounded vehicles are kept.

WHAT TO DO & WHAT NOT TO DO:

Stop your vehicle when a traffic policeman so indicates.
You may ask him what the reason for your being stopped was.
Do not argue with the policeman. If you feel there is a genuine argument for your having broken a rule, explain it to him.
If you have committed a mistake, admit it candidly, seek his pardon. He may well let you off with a warning if approached with courtesy.
Do not drop names of policemen and influential people.
If the policeman is insistent, show him the requisite documents, and allow him to take whatever action falls within the purview of his duties.

WHAT ACTION A POLICEMAN MAY TAKE:

He may note down the particulars of your licence which will later be forwarded to a court. The court will then issue instructions regarding what course of action is to be taken - a certain amount as fine. If you plead guilty and send the requisite amount, the case will be filed, else summons will be sent to you and the case will be judged on merit.
He may impend your Drivers' Licence and issue a temporary licence (which lasts only for a stipulated period). You may compound the offence by paying a fine at the police station under whose jurisdiction the licence was impounded. Else you will be provided a summons from court, if you fail to appear in court, an arrest warrant may be issued.
If the policeman is an officer of rank sub-inspector or above, you may compound the office on the spot by paying a fine. The relevant recipts will be provided to you.

IF HARASSED BY A TRAFFIC POLICEMAN:

If a traffic policeman harasses you for illegal gratification, never yield to his demands.
Allow him to impound your licence, do not attempt to bribe him even if coerced.
Note down his buckle number/name which will be written on a plate on his shirt. If he does not have one, you may demand his identity card. If he fails to provide you an identity card, refuse to give him your documents.
All receipts, temporary licences will have the name/buckle number of the officer.
You can approach the traffic police with a specific complaint indicating all the particulars about the incident, this MUST include details about the concerned police officer. It is desirable to send this complaint by registered post.

SOME IMPORTANT OFFENCES:

Not carrying valid licence while driving /. driving without a licence.
Allowing a vehicle to be driven by someone who does not have a licence.
Driving without insurance / permit / fitness
Speeding / reckless driving
Driving under the influence of alcohol.
Lane-cutting / dangerous lane-cutting.
Moving against a One-way.
Stopping at a pedestrian crossing / crossing a stop line.
Improper use of headlights.
Using a private vehicle for commercial purposes.
Overloading a goods vehicle.
Carrying goods in a dangerous manner.
Taxi Drivers refusing to ply / charging extra / not wearing uniform.

If a person after having committed an offence (under the Motor Vehicles Act.) refuses to give his name he can be arrested by a police officer.