Police rushed to the spot immediately and threw the leaking cylinder into water to neutralise it, SP (City) Pradeep Kumar Rai told PTI.
People living in the water works area including children, mostly sleeping at that hour, were rushed to different hospitals in the city after they complained of difficulty in breathing and some of them even fainted, Mr Kumar said.
Altogether 17 people were hospitalised out of which eight were admitted in Mahanth Indresh hospital, five in Max Hospital and four in CMI hospital, the SP said.
However, all of them are out of danger with a majority already discharged from hospitals, he said.
The Managing Director of Jan Sansthan said an inquiry is being conducted into the incident.
Residences of officials of the Jal Sansthan are located close to the water works at Dilaram Chawk.