Gurcharan Singh alias Rinku of Channuawala village, and Khushwinder Singh alias Sukhpal of Sangatpura village in Moga, were released after the police informed the court that it did not have sufficient evidence against the two on their involvement in the case.
The duo were arrested in a robbery and assault case on Sunday after being injured in an encounter on June 25 night at Moga by-pass in which two gangsters Sukhdev Singh and Inderpreet Singh Gora were killed by Chandigarh police.
However, police today filed an application in the court under section 169 CrPC for their release for the time being due to insufficient evidence.
The SIT has so far found that there is no sufficient evidence or reasonable ground for suspicion of their involvement in the case, Investigation Officer Inspector Jatinderjit said.
Chief Judicial Magistrate Pooja Andhotra, after hearing the arguments ordered the release of both of them.
Two cops of Chandigarh police were also injured in the encounter. Punjab government had last week set up a SIT to enquire into the matter, officials said.