Six people were believed to be still trapped inside the building in Sular Gharat, they said.
Sangrur SSP Mandeep Singh told PTI over phone that fire fighters had reached the spot and trying to douse the fire.
The reason behind the fire was not immediately known.
Punjab Chief Minister Capt Amarinder Singh directed the Deputy Commissioner, Sangrur, to ensure the injured were not charged at hospitals and adequate arrangements were in place to evacuate people from the building, an official spokesperson said.
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