On a tip off about the presence of three-four members of the outfit in a jungle in Serfunguri area, a joint team of the Army and police reached there, Superintendent of Police Rajen Sing said.
On seeing them, the militants started firing and the securitymen retaliated and in the shoot-out, one extremist was killed while the others managed to flee, he said.
The deceased is yet to be identified.
The SP said an AK series rifle, 16 rounds of ammunition, a mobile phone with a Bhutanese SIM, Rs 2,740 in cash, extortion notes and some medicines were recovered from the spot.