An exchange of fire with police resulted in the death of a gangster in Telangana's Shadnagar town, officials said.
Nayeem, a former Maoist-turned-gangster, was travelling in his car which a team of police intercepted.
Panicked to have seen police, he began firing gunshots on them, who returned the fire that killed him, the Telangana Police official said. His driver somehow managed to escape the scene.
Nayeem was accused of killing a police officer and many former Maoist leaders.
The encounter took place near a house in Millennium Township in Mahabubnagar district, about 50 km from Hyderabad.
Earlier reports said Nayeem was hiding in the house and the police surrounded the house acting on a tip-off, and that he was killed during an exchange of fire.
Mahabubanagar district Superintendent of Police Rema Rajeswari told reporters that one AK47 was found and a pistol was recovered from Nayeem's vehicle.
The police officer said an extortion case was registered against a suspected person in Nizamabad district. The suspect had demanded Rs 1 crore.
"An investigation team and local police reached here following information about the movement of the suspect in a white Ford Endeavour," she said.
"The search operation in the house is still on. We will come out with all details later," the SP added.
Mohammed Nayeemuddin alias Nayeem, a native of Bhongir town in Nalgonda district of Telangana, was an accused in several high-profile criminal cases, including the murder of Indian Police Service officer K.L. Vyas in 1993. He was allegedly also involved in over 130 criminal cases, including 20 murder cases.
After he came out of the fold of then People's War Group (PWG), Nayeem turned a gangster. He allegedly also became a covert operative for police and eliminated several top Maoists and their sympathisers, sources said.
Nayeem was an accused in the murder of civil rights activists Purshottam and Niranjan, folk singer Belli Lalitha, surrendered Maoists Sambasivudu and Ramulu, gangster Pattola Goverdhan Reddy and others.
He was also suspected to have helped police in catching Sohrabuddin Sheikh and his wife who were later killed in an alleged "encounter" -- an euphemism for a staged gunbattle -- by Gujarat Police in 2005.
The gangster had escaped from police custody 11 times.
He was allegedly threatening legislators and leaders of the ruling Telangana Rashtra Samithi (TRS), the sources added.
(With IANS inputs)
