Manchester City netted three quick first half goals to pile more pressure on coach Frank Lampard in their second Premier League loss in a row.
The visitors were without the services of some of their key first team players who were confirmed to have tested positive for COVID-19.
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Gundogan ensured it was 1-0 for City netting a low cross before Phil Foden doubled the lead in 21st minute thanks to the creative play by Kevin de Bruyne.
The Belgium ensured he was also on the list of scorers tapping in the 34th minute thanks to a Reheem Stirling rebound after hitting the woodwork.
Chelsea got a consolation goal in the extra time when Callum Hudson-Odoi firing home Kai Havertz ball into the top of the net and past Zack Steffen.
The win sends Manchester City to postion five with 29 points and two games left to play. This leaves the top position open with Liverpool taking the lead with 33 points from 16 matches played,
Chelsea now lie in position 8 with 26 points, three points above Arsenal who thrashed them in their last encounter at the Emirates.