We were/lived in Mohammadpur housing estate colony.
"We were in X colony" can mean "we lived in X colony" in certain contexts, but not usually.
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"We were in X colony" can mean "we lived in X colony" in certain contexts, but not usually.
green chalk 27We were/lived in the Mohammadpur housing estate colony.
If you lived there (had a house or apartment there that you occupied for some time), use 'lived'.
If you just went there to visit friends or to look for a place to live or if you just passed through, use 'were'.
CJ