Visuals from the spot showed the car - parked on the side of a road - up in flames as people looked on.
A car with three persons inside it was set on fire in Andhra Pradesh's Vijayawada on Monday. While all three of them were injured, one of the persons is said to be serious.
Real estate dispute is suspected to be the reason for the attack.
The man who allegedly set the white car on fire - Venugopal Reddy - escaped from the spot and searches are on to catch him, V Harshavardhan Raju, a senior police officer in Vijayawada said.
"Venugopal Reddy was a business partner with Gangadhar some time ago. They used to buy and sell second-hand cars. However, their business did not run well. After incurring losses, Venugopal and Gangadhar parted ways," he told news agency ANI.
The officer said the accused had been trying to talk to Gangadhar but that the latter did not respond.
The police said Gangadhar, his wife and one of his friends had gone to meet Venugopal Reddy on Monday. "All four persons were discussing the matter in the car. At around 4.45 PM, Venugopal got down the car on the pretext of smoking a cigarette. He poured the petrol, which he brought in a whiskey bottle, on the car and set it ablaze. Venugopal Reddy ran away from the spot," the police officer said.
Visuals from the spot showed the car - parked on the side of a road - up in flames as people looked on.
The three who were inside the car were taken to a hospital. While the couple has minor injuries, the husband's friend who was with them inside the car has serious burns, the police said. Mr Gangadhar's wife was sent home after being given first aid and her husband was taken to a police station to record his statement.
A case will be filed after finishing the legal formalities, the officer said.
(With inputs from ANI)