A 25-year-old woman was set ablaze by her lover here on New Year's Day after she turned down his demand for money, police said on Wednesday.

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The incident took place yesterday when accused Aftab Khan poured kerosene on Jaispal Khan and set her on fire at her residence in suburban Mankhurd, after she refused him money, they said.

The woman sustained 95% burn injuries and was rushed to Sion hospital, where she is undergoing treatment.

"Jaispal, a fish seller, was married to Javed Khan seven years ago but she was not staying with her husband and was having an affair with the accused for past four years," police said.

Police have registered a case of attempt to murder against Aftab and launched a manhunt to arrest him.