Awadhpal's brother Amarpal Singh had given Rs 20 lakh loan to their brother-in-law Kishanveer, Additional Superintendent of Police Radha Mohan Bharadwaj said.
He said that Amarpal demanded money from his nephew Amarjeet leading to dispute which led to a scuffle and the duo exchanged fire this morning.
Later police arrested Amarpal and Amarjeet on charges of attempt to murder and send them to jail, the ASP said.