The deceased was identified as Aurangajeb alias Jebu, 50 son of Nabiruddin of Deluabaria bazar in the upazila.
Superintendent of Naogaon Police Abdul Mannan said a team of DB police arrested Jebu from Deluabari Bazar on Monday night.
After gleaning information from Jebu, a team of DB police conducted a drive in the area in the early hours on Tuesday.
Sensing presence of the law enforcers, the criminals opened fire on police, forcing them to fire back in self-defense that triggered a gunfight.
At one stage, Jebu was caught in the line of fire and died on the spot while the others managed to flee the scene.
Mozaffar Hossain, officer-in-charge of Manda Police Station, said Jebu was a listed ‘drug trader’ in the area and wanted in 20 criminal cases.
Three policemen, including DB sub-inspector Mehedi Hasan. were injured in the incident.
Huge quantity of heroin, Yaba pills, one pistol and some sharp weapons were recovered from the spot.
A case was filed with Manda Police Station.