Daya Ram, a former member of Chaumuha Nagar Panchayat, who is a goldsmith, was shot at by four bikers who snatched the bag containing gold jewellery, SP (City) Manoj Sonkar said.
He was rushed to hospital where doctors declared him dead.
Meanwhile, villagers nabbed one of the fleeing robbers and beat him up till he got unconscious. He was rushed to the district hospital, Sonkar said.
The arrested robber is being interrogated, he said.
The blockade was lifted after the villagers were assured of early arrest of the remaining robbers, the SP added.