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Security forces returned the fire, killing two hardcore militants of the Yung Aung faction of the NSCN-K.
Two automatic assault rifles including an MQ series rifle, an M-16 rifle, two countrymade guns, one 9 mm pistol, one Chinese hand grenade, ammunition and other warlike stores were recovered from the spot.
A group of around 10 rebels of the outfit led by self-styled captain Rocky Thapa, were active in the area for the past one month. They were extorting money from villagers of Kollam, Lomlo, Kolagaon and Lamsa under Khonsa and Deomali circles of the district, the report said.
They also threatened a civil contractor engaged in construction of roads in Deomali circle to pay extortion money, it said.