The incident happened this afternoon when someone from one group passed some "objectionable" remarks on a woman from the rival group, Superintendent of Police, Palwal, Rajesh Duggal said.
He said the two groups entered into a heated exchange.
The eyewitnesses and the kin of the deceased told the police that a suspended Haryana policeman allegedly opened fire during the heated exchanges in which four persons died, he said.
"They (the eyewitnesses) told us that the woman was relative of the 'suspended personnel'. Irked by some objectionable remarks passed against her, the cop opened fire with his pistol resulting in the death of four and injury to one person," Duggal said.
"We rushed heavy police force to the village and now the situation is under control," he said.
He said the main accused and some others who were with him at the time of the incident were absconding and police are hunting for them.
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