Pankaj Kumar was released by his abductors in the neighbouring Khunti district yesterday following intensive police raids, they said.
Kumar was abducted by the suspected rebels while he was supervising the construction of a bridge at Sumandi village on February 14.
Bundu Deputy Superintendent of Police Ram S Rai dismissed reports that the engineer was freed following payment of extortion money.
"The abductors ran away leaving the engineer yesterday under police pressure," he said.