The act of arson took place outside the wholesale vegetable market of Rishikesh at 11.45 AM sparking tension in the area, DIG Garhwal range Pushpak Jyoti said.
The fire was doused by firetenders who were rushed immediately to the spot and no one was injured, he said, adding the tension was defused because of timely intervention by the police.
Prohibitory orders under section 144 of CrPC was imposed as a preventive measure outside the market, the police said.
Other areas of Rishikesh under prohibitory orders are IDPL and Shyampur Chawkis, the official said.
Business rivalry between two scrap-dealers is said to have been the reason behind the tension, the DIG said, adding investigations are underway.
Police will not tolerate any attempt to disrupt peace in the town, DIG Jyoti said.