A new approach to segmentation of machine printed Gurmukhi text has been suggested. This approach can easily be extended to other Indian language scripts such as Devnagri and Bangla. Most of the characters in these scripts have horizontal lines at the top called headlines. Besides, there are cases in which the characters are found touching in the scanned image, just below the headline. To resolve these issues, a two-pass mechanism is used. In pass-one it approximates the segmentation point, while in pass-two the cutting point is optimized. This approach has been very successful in segmenting a pair as well as triplets of touching characters.