The three were caught after the encounter in the forests of Mohania on the Katkumdag police station of Hazaribagh and Simaria police station, Superintendent of Police Bhimsen Tuti said.
The SP said the police have seized one rifle, one country-made carbine, two other firearms, 177 rounds of live ammunitions including 7.62 cartridges and SLR cartridges, ten mobile phone sets and Rs 62,250 in cash, besides diaries and magazines and receipt books and other incriminating documents.
On the basis of the complaint, the SP said the police arrested dreaded JPC activist Md Bilal alias Bablu of Simaria after getting a secret information.
Following the interrogation, Bilal gave information about a plot to realise heavy amount of levy from contractors.
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Tuti said Bilal also gave information about the whereabouts of JPC supremo Dashrath and his gang, who was camping in the Mohania forests.
The SP said on the basis of this information, the police constituted a team and surrounded Mohania forest.