In this thesis work the text found on the vehicle plates is detected from the input image and this requires the localization of number plate area in order to identify the characters present on it. In this thesis work, simple colour conversion edge detection and removal of noise with the application of median filter as one of the operators is attempted. This thesis work presents an approach using simple but efficient morphological operations, filtering and finding connected components for localization of Indian number plates .It proposes the identification of stolen cars .The algorithm has been tested on 20 samples and is found to extract both alphabets and numbers from vehicle license plates images with an accuracy of 90% for four wheeler license plates.