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The deceased Keralite, Vishnu R, 35, was a native of Palode in Thiruvananthapuram.
A huge cache of weapons and other materials belonging to Naxalites were recovered from the encounter site.
At least 29 Naxalites were killed in an encounter with security personnel in Chhattisgarh's Kanker district on Tuesday.
According to reports, top Maoist leader Shankar Rao was killed in the big encounter.
The exchange of fire occurred near the Tekalgudem village when a joint team of security personnel was out on a search operation.
He was arrested and remanded in custody on July 29 in connection with a protest staged before the mortuary of the Government Medical College Hospital, Kozhikode, seven years ago.
A poet, activist and revolutionary balladeer, Gaddar was celebrated for turning his powerful words into inspirational songs.
Vasu had demanded a judicial inquiry into the killings.
Gope alias "Kuldeep Yadav" alias "Badku", who had more than 100 criminal cases against him and was carrying a reward of Rs 30 lakh on information leading to his arrest, was held in Delhi, the official said.
The incident took place under Aranpur police station limits when a team of the state police's District Reserve Guard (DRG) was returning after an anti-Naxalite operation, a senior official said.