What is the correct onion to tomato ratio for North Indian masala sauce?
I am not intimately familiar with the recipe but according to the recipes I have researched the ratio seems to run the gamut from 2-1 tomatoes to onions all the way to 1-1 tomatoes to onions. I would recommend starting at the 2-1 ration and adjusting according to taste.

Here are the recipes I reviewed:

http://www.food.com/recipe/onion-tomato-masala-194144

http://www.spiderkerala.com/kerala/recipes/ViewRecipe.aspx?RecipeId=162

http://nsushma.blogspot.com/2009/09/tomato-masala.html

I hope that helps! Ideally someone with more experience with this dish can eventually write a more comprehensive answer.