Sana Jagga (28) of Bhejiput sustained injury in his left leg during encounter after police launched an operation yesterday following a tip-off, SP (Ganjam), Asish Singh said.
He was admitted at MKCG Medical College and Hospital here and his condition stated to be out of danger.
Police also detained three of his associates who were with him during the encounter, the SP said.
One pistol with ammunition, two motorcycles and some crude bombs were seized from him, said the SP.
Police intercepted them, but they threw bombs and opened fire and police fired two rounds in self defence, said Inspector in charge of Bhanjanagar police station AK Sahu.
No police personnel was injured.