The ill-fated private bus, which plunged into Beas river after skidding off the road, was carrying about 70 passengers.
Eyewitnesses said that the mishap occurred as the driver lost control of the vehicle while talking on his mobile phone.
The driver, who jumped off the bus before it hit the water and fled the scene, was arrested by Kullu police this morning, a release here said.
Thirteen injured persons are currently undergoing treatment at a hospital in Kullu, where the condition of five of them was stated to be critical.
Meanwhile, the state government has ordered a magisterial probe into the accident.
DGP Kamal Kumar too has sent a team headed by AIG Rajesh Dharmani along with traffic and railway police to take over the investigation into the mishap, which occurred some 250-km away from the state capital.
The passengers of the over-crowded bus were on their way to attend a three-day local festival at Ani.
Efforts by rescuers to reach the wreckage of the bus in order to pull out bodies and look for survivors was hampered by the turbulent waters of the river in this area.
Kullu Deputy Commissioner Sharab Negi, who did not rule out the possibility that some passengers might have been washed away in the waters of the Beas, said search operations were on along the banks of the river.
The DGP has directed the inspector general of police (traffic) and railways to issue guidelines for field officers that they may adopt measures which would prevent recurrence of such accidents.
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