Over 150 shanties were burnt down and several vehicles damaged by mob that went on a rampage after local authorities tried to remove encroachments in Meerut's Sadar Bazar area.
The police said their men were also fired at from the rooftops, but, there were no casualties.
Over two dozen cars, two-wheelers, eight or nine Uttar Pradesh roadways buses were damaged in the violence triggered when the Cantonment Board and the police tried to remove encroachments in the city's Bhusa Mandi area.
The police said unidentified people set some jhuggies on fire, after they arrested four men.
People from communities blamed each other for starting the fire, escalating tension. The situation was later brought under control, the police said.
A magisterial inquiry has been ordered, District Magistrate Anil Dhingra told news agency PTI adding, the situation was "tense but under control".
Asked about the reason behind the incident, he said it would be clear after enquiry.
Trouble began when Meerut Cantonment Board members along with a police team reached Bhusa Mandi area to remove illegal encroachments from the market, said officials.
Agitated over the actions of the civic authorities, the unidentified people resorted to stone pelting, snatched a wireless set from a policeman and a mobile phone from one of the Cantonment Board members.
It led police to lathi-charge the mob in order to disperse them, the officials said.
Reacting to the police action, the anti-social elements in the agitating crowd set a few nearby jhuggis on fire, which spread rapidly. Shopkeepers shut their shops and a police force was deployed, they said.
Meerut district magistrate and police superintendent patrolled the area. As a precautionary measure, the police diverted traffic on Delhi Road and blocked all roads leading to the affected area.
A local bus driver Sunil Kumar told news agency PTI that his bus was attacked by a mob of over 100, who injured nearly 30 passengers, including a woman and her child.
Mr Kumar said he kept on calling police on police control number 100, but failed to get any response, while the mob indulged in rioting and looting passengers of several buses.
"Local movie theatre cancelled its show midway and a stampede like situation cropped up with the movie goers rushing out of the cinema hall amid the reports of fire," eyewitnesses said.
According to reports, broken pieces of some bottles too were found in the troubled area, giving rise to doubts that the accused also used patrol bombs.
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