Theory:

     It seemed as if God appreciated that. The snake turned its head. It looked into the mirror and saw its reflection. I do not claim that it was the first snake that had ever looked into a mirror. But it was certain that the snake was looking into the mirror. Was it admiring its own beauty? Was it trying to make an important decision about growing a moustache or using eye shadow and mascara or wearing a vermilion spot on its forehead?
Explanation:
 
The narrative had reached a tense climax. One can imagine how eager the narrator was to know how the doctor was saved from the snake at that point. The doctor then told that it appeared that God had appreciated his realisation of his folly. That is, the doctor realised his foolishness. It doesn't only imply that, despite being a doctor, he realised his folly in not keeping medicine in his room. It also implies that the doctor has come to terms with the fact that worldly things are meaningless. A handsome doctor, who prided himself on his appearance and profession, was unable to save him from a snake. Here's when the story takes a turn as the cobra abruptly moved its head away from the doctor and toward the mirror on the opposite side. And it began to concentrate on looking in the mirror at its own reflection.
 
The doctor then told the narrator that he was sure that the snake was looking in the mirror and appreciating its beauty. He also said that the snake may be considering growing a moustache, using eye shadow and mascara to make itself appear more attractive, or putting a red-colored bindi on its forehead. The doctor's sense of humour is implied in these lines, even if they are exaggerated.
 
Meaning of difficult words:
 
S.No
Words
Meaning
1.
CertainA strong belief without any doubts
2.
Vermilion Bright red in colour
Reference:
National Council of Educational Research and Training (2006). Beehive. The Snake and the Mirror - Vaikom Muhammad Basheer (pp.56-60). Published at the Publication Division by the Secretary, National Council of Educational Research and Training, Sri Aurobindo Marg, New Delhi.