The youths introduced themselves as CBI officers to enter the residence of Trilok Chand in Swaranjayanti Puram in Kavinagar area, police said.
The armed youths held Trilok's wife Kuldeep, his 4-year-old son Gurpreet and his mother Sabarjeet (75) hostage, they said, adding the contractor was not in the house at the time of incident.
"The accused, who came in a car, told Kuldeep that they were from CBI and wanted the check the house. Following which, she allowed them inside," a senior police officer said.
On the Trilok's complaint, a case was lodged at Kavi Nagar police station against the accused.
A manhunt has been launched to arrested the accused, he said.