Muhammad Salim, 50, a resident of Lahore, was arrested in 2013 and was facing a trial on charges of committing blasphemy. Blasphemy is liable to death in Pakistan.
Zubair Ahmed, a relative of Salim, told PTI that last Friday three prisoners had heated arguments with Salim over the charges being faced by him.
"The arguments led to a quarrel between them. They punched him (Salim) severely and as a result he fell unconscious. He was taken to hospital where he died," Ahmed said.
Camp Jail Superintendent Shahraam Tauqeer Khan denied that Salim died of torture by inmates.
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"Salim was a mental patient as a government's medical board had already declared him a patient of schizophrenia. On Friday his blood pressure was reported to be low and he was rushed to hospital where he died. The apparent cause of his death is cardio pulmonary arrest," Khan said.
He said the jail authorities had written to the sessions judge Lahore for a judicial inquiry into the incident.
Last month, a prison guard at the Adiala Jail Rawalpindi shot and injured a 71-year-old British-Pakistani man imprisoned over blasphemy charges.