The bus was going to Ludhiana from Chintpurni in Himachal Pradesh when the accident took place, they said.
Due to alleged failure of brakes, the bus driver lost control over the vehicle and rammed it into a stall on the road side where community kitchen was being served and killed seven persons, police said.
A number of stalls had been erected on the Hoshiarpur-Chintpurni route due to the ongoing pilgrimage of Sawan Ashtami fair of the holy shrine of Goddess Chintpurni.
Meanwhile, Punjab Chief Minister Parkash Singh Badal expressed shock and anguish over the tragic bus accident.
Badal offered condolences to the bereaved families, and said the state government will bear all expenses for the treatment of the injured.
The chief minister also asked the Deputy Commissioner and SSP Hoshiarpur to extend all possible help to the family members of the deceased.
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