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The fire broke out at a wholesale toyshop near the Sree Padmanabha Theatre on Monday evening.
The historic city, spread across 2,192 sq km, is an epitome of communal harmony.
Chala has played a significant role in the growth and development of Thiruvananthapuram.
An entry gate will be built on the model of the East Fort at the entry point to Chala opposite Gandhi Park.