The blaze began around 7 AM after a powerloom unit on the ground floor of the building at Nagoan caught fire and spread to the first floor, where yarn and other raw materials were stored, Vaishali Lambhate, tehsildar of Bhiwandi located about 35 km from Mumbai, said.
Both the floors housing a sizing unit as well as a goods godown were completely damaged in the mishap.
According to Gaikwad, revenue officials were preparing the 'panchnama' to assess the damage/losses caused by the fire while civic officials were examining the other factors including the safety measures taken by the owner of the unit, he said.
Attributing the cause of the fire to a "short circuit", Lambhate said a criminal case will be soon filed in this regard.
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Eyewitnesses said that chaos reigned at the mishap site this morning as locals ran out of the homes on seeing smoke emanating from the ground and first floor of the building.
The trapped families were directed to move to the building terrace from where they were rescued later with the help of snorkel ladders brought by Thane and Kalyan fire brigade personnel, he said.
He said as many as 170 residents including women, elders and children stranded on the terrace were brought down safely.
The raging fire was doused around noon, an official said.