The panic-stricken passengers managed to get out of the bus, some of them even jumping out through the windows, after the fire broke out in the gear box, police said.
Initially, smoke emanated from the gear box and after some sparks flew from it, triggering the fire, the driver jumped out to fetch water.
Shop owners in the vicinity rushed to help with water before the fire and rescue personnel arrived there and put out the fire in about 20 minutes.