The gang was busted after police intercepted a car during vehicle checking at Agri Kallan crossing on Srinagar-Gulmarg road on March 2 and found the documents presented by its driver to be fake, a police spokesman said.
He said the driver was arrested and the vehicle seized.
"During the search of the vehicle, fake registration certificates, insurance certificates, no objection certificates and other material like number plates, iron driller, revert gun, hammer and screws were seized, the spokesman said.
"Accordingly, a case was registered and a team was constituted to identify the culprits and bring them to justice," the spokesman said, adding three persons involved in the crime were arrested so far and some more arrests are expected in the coming days.
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He said the gang was preparing fake registration certificates, insurance certificates, NOCs and registration number plates at Akter Advertisers shop in Budgam.
He said the arrest of the trio led to the recovery of 11 stolen vehicles from different parts of the Valley.