The explosion apparently occurred when the victims were trying to remove brass from exploded grenades, police said.
The bodies of the deceased, identified as Mamo (60), wife of Faqiria of Shastri Nagar, and Mohan Lal (20), son of Kalli Ram of Mohalla Kamalpur, were blown into pieces, they added.
The injured were admitted to the local Civil Hospital, police said.
Hoshiarpur SP Kulwant Singh, who reached the spot immediately after the incident, said the exact cause of the explosion was yet to be ascertained.
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