The policeman was identified as Bohad Singh who was posted at Sangrur Central Jail as deputy superintendent. The bar manager, Rajeev Kumar, died on the spot.
Eyewitnesses said Singh used to frequent the bar.
The duo reportedly had a heated altercation over payment for liquor following which Singh opened fire at the manger and managed to excape from the spot.
Police sources said a hunt was launched to nab the cop. Singh was reportedly on leave on Tuesday.