A huge stock of mobil oil drums, said to be owned by a trader Raju Khan, was kept in the building when the fire broke out, they said.
Khan's family was safely moved away from the house by the firemen and local residents, they said.
Owing to the huge stock of highly inflammable mobil oil, the fire engulfed the entire building within a few minutes, police said.
Fire tenders from several stations were deployed to douse the flames, they said, adding that it took nearly six hours to bring the fire under control and check it from spreading to other houses in the locality.
However, he added, "sparking from a running generator was reported to be the immediate cause."
Investigations would be carried out to ascertain if the building owner had obtained proper permission to set up a godown and keep stock of mobil oil in such a large quantity in a residential building located in a densely populated area, the SP said.