Jogi Gouda (28) of Arjunapalli village within the limits of Kabisurya Nagara police station, sustained bullet injury in his left-leg during the encounter last night, they said.
He was admitted at MKCG Medical College and Hospital here and his condition was stated to be out of danger.
A mauser with some ammunition and a motorcycle were seized from him, Sub-Divisional Police Officer (SDPO) Purushottampur, Dillip Das said today.
During patrolling in the area, he was trying to escape from the spot by firing at the police. He fired at least three rounds at the police and in reply police fired two rounds. The SDPO said no police person was injured in the exchange.
The SDPO said he had set up a gang of anti-socials in Dumuduma and Salia Sahi in Bhubaneswar to commit criminal activities and create terror in several areas in an organised way.