According to police, the incident took place at around 3 A.M. When the members of two rival gangs came upon each other at a neighbourhood marketplace.
The fight occurred between the Neetu Dabodia and Neeraj Bawana gangs, which are struggling to re-establish their sway in northwest and outer Delhi following recent police encounters and arrests, police added.
Three persons were injured in the clash, of whom one succumbed in hospital, identified as one Anil alias Leela.
"At around 3 A.M., four men from the Neeraj Bawana gang and five members of the Neetu Dabodia gang confronted each other on Rani Bagh Road No.4," police said.
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"They were armed with country-made weapons and, as they started firing on each other, someone from one of the residential colonies nearby informed us," police said, adding that around 15 shots were fired during the clash.
Police said that Dabodia was gunned down some time back in an encounter with Special Cell in south Delhi.