Sources said police and <g data-gr-id="33">protestors</g> exchanged gunfire in Behbal Kalan area near Kotkapura, leading to the death of two people and injuries to several others.
Police used batons and water cannons and even fired in the air to disperse hundreds of protestors hurling bricks, stones and other things at the police.
A clash took place in the main square of Kotkapura town, 230 km from <g data-gr-id="39">here,</g> when police tried to arrest the leaders of the protestors who attempted to block the highways towards Moga and Bathinda towns.
Most of the injured, included protestors and around 30 police officials, were taken to hospitals for treatment.
The Sikh protestors were up in arms against the desecration of a '<g data-gr-id="34">bir</g>' (holy book) in Bargari village, 15 km from Kotkapura.
Tension mounted in Kotkapura area on Monday after over 100 pages of the Sikh holy book were found scattered in a street near a gurdwara.
The holy book was stolen from a gurdwara in June.
Areas around Kotkapura remained tense on Wednesday morning after a series of messages on social media regarding the desecration.
Protestors clashed with police in Buttar Kalan village of Moga district on Tuesday, leaving many injured. Nearly 200 protestors were rounded up in Kotkapura on Tuesday but were released later.
Punjab Chief Minister Parkash Singh Badal urged people to remain calm.
The Punjab government announced setting up of a special investigation team (SIT) headed by deputy inspector general (DIG) A.S. Chahal to investigate the desecration of the holy book.
Congress Deputy Leader in the Lok Sabha and former chief minister Amarinder Singh on Wednesday strongly condemned the deaths of two people in alleged police firing near Kotkapura.
"Chief Minister Parkash Singh Badal has virtually lost control over things and the state is drifting towards anarchy," Amarinder said.