The photo, which showed a group of people in uniform surrounding the body of a woman, was propagated on social media as taken during the November 24 Nilambur encounter.
This was aimed at triggering public sentiments against the government and police, a police release said here. The case was registered as per the direction of DGP Rajesh Diwan, who is in charge of Crime Branch.
It was found during the investigation that the picture under circulation was the photo of a woman, who was killed in an encounter in Odisha-Chattisgarh border in October, 2015, the release said.
The picture had been downloaded from a Odisha-based website and circulated on social media, it said. Diwan said those who propagate such fake news with an aim to strengthen terror activities against the government and police and trigger people's sentiments against them, would face legal action, the release added.
Two Maoists -- Kuppuswamy Devaraj, a central committee member of the outlawed outfit, and Ajitha were killed in the 'encounter'during search operations launched based on a tip-off that some Maoists were camping in the area.