The incident took place when the victims G Maraiah, P Maraiah and G Nageswara Rao were attacked after the miscreants rammed their vehicle into the moving car at Pedavutapalli village and opened fire, killing two of them on the spot, Police Commissioner A B Venkateswara Rao told reporters here.
The third man succumbed on his way to the hospital.
According to police, the trio were accused in a murder case of one Durga Rao, killed on March 4 this year in Pinakamidi village in West Godavari district.
Further investigations are underway, they added.