Deputy Superintendent of Police Raj Kishore Singh said the encounter took place last night when police, acting on a tip off that dacoits were fleeing, chased a vehicle and were fired upon by its passengers.
The police retaliated and shot dead the two persons, one of whom was identified as JD(U) MLA Shyam Bihari Singh's relative Raju Singh.
Four other occupants of the vehicle managed to escape and the police recovered a dozen weapons and ammunitions from the vehicle, the DSP said.