This is the 15th mishap onboard a naval vessel in the past ten months.
While naval sources said the incident took place at around 11.15 this morning when some welding work was underway, an official statement denied that there was a fire, and added that all the four personnel were discharged from the hospital after "precautionary check-up".
"The welding gun took time to ignite and when it did, thick flames erupted from the gun, injuring four people including two civilians," the sources said.
An official statement from the Navy described the incident as "a loud noise in the boiler room" while the ship was in the dry-dock undergoing repairs and refit.
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"The cause of the loud noise is possibly due to gas accumulation. There has been no fire or any damage to any equipment in the ship," it said.
Two sailors and two civilian dockyard workers were taken to hospital, only for precautionary check-up, and were immediately discharged and the situation was normal, it added.
The Indian Navy has witnessed a spate of mishaps in the past ten months, which led to Chief of Naval Staff Admiral D K Joshi to resign in February.