The CCD Civil Lines said on Tuesday that the suspects were being transported for investigation when the encounter took place.

Police stated that the accused had earlier been arrested from Sahiwal and Narowal and had made key disclosures during interrogation.

Officials said Rs1.2 million in cash had been recovered from their possession.

The deceased were identified as Naeem alias Andheri, Ashraf and Kabir.

Sources claimed that Naeem, described as the ringleader, had formed a new gang after his release from jail and was allegedly involved in multiple criminal activities.

Police said further investigation is under way and various aspects of the incident are being reviewed.