The fire broke out in the AC 3-tire coach B-1, fourth from the engine, near Sri Satya Sai Prasanthi Nilayam railway station, about 170 kms northeast of Bangalore, at 3:45 a.M when most of the passengers were fast asleep.
After noticing the fire, the driver stopped the train near Kothacheruvu railway station and the ill-fated coach was detached, preventing the fire from spreading to other bogies.
SP of Guntakal Railway Police Janardhan said 13 people were injured in the mishap and have been shifted to various hospitals in Anantpur.
Exact cause of the fire is not immediately known but Railway Board Chairman Arunendra Kumar said prima facie there could be two reasons - one is short circuit and the other presence of inflammable material.
Railway Minister Mallikarjun Kharge described the incident as "tragic and most unfortunate" and ordered an inquiry by the Commissioner of Railway Safety.
Forensic teams from Hyderabad are on their way to the spot to collect samples for analysis.
The train had left Bangalore at 10:45 PM last night with a composition of 16 coaches, South Western Railway said, adding that the affected coach was carrying 65 passengers.
According to railway officials, the bodies of passengers are being shifted from the accident spot to Victoria Hospital in Bangalore.
Prime Minister Manmohan Singh expressed shock and grief over the loss of lives in the mishap.
The Railway Minister announced an ex-gratia of Rs 5 lakh to the next of kin of the deceased, Rs 1 lakh in case of grievous injuries and Rs 50,000 for simple injuries.
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