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Relu Ram Punia, who was elected to the state assembly in 1996, had organised a birthday bash for his youngest daughter Priyanka, a student in a public school, at his farm house on Thursday night.
The victims were served food mixed with poison and then allegedly battered to death by Punia's second daughter Sonia and her accomplices, a police spokesman said.
Bodies of Punia, his wife Krishna, son Sunil (28), daughter-in-law Shakuntla (23), daughter Priyanka (18) and three grand children - Lokesh (4), Shivani (2) and Preeti (six months) - were found in their beds with blood splattered all around.
Sonia, who attempted to snuff out her own life by consuming poison, is now in hospital, he said.
A suicide note, found in the room where Sonia fell unconscious, said "I am fed up with my family for not giving me due share of the property and I am going to eliminate them as well as myself."
The spokesman said the note had been sent to handwriting experts.
The killings came to light at about 0700 hours (IST) on Friday morning after villagers grew suspicious when normal activities were not noticed in the house.
Sonia made a brief statement before Sub-Divisional Magistrate Balraj Singh saying she wanted to die as she was not getting her share in the family property.
Sonia, married to a youth in Saharanpur, had come to her native place recently. Her husband is employed in Faridabad in Haryana.
The spokesman said post mortems conducted on the bodies revealed that the victims took some poisonous substance. It also showed that they were killed using iron rods.
Police said the number and identity of Sonia's accomplices were not yet available, adding she was not in a condition to give a detailed statement.
Hisar Senior Superintendent of Police Rajpal Singh has constituted a team to probe the gruesome killings.
Neighbours said the family was celebrating Priyanka's birthday till past midnight.
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