Vikas Munda's father former Minister Ramesh Singh Munda was killed in 2008 by the Maoist who is facing 128 cases, including 70 murder cases, and carried a Rs 15 lakh award on his head.
He was also behind the beheading of police Inspector Francis Induwar in 2009.
"Common people killed by Maoists are given a compensation of Rs 1 lakh and Maoists who kill innocent people are rewarded Rs 15 lakh," Munda said.
He said: "There should be a CBI probe in the surrender of Kundan Pahan and he should be hanged."
The AJSU is part of the Bharatiya Janata Party-led ruling alliance in the state.
The main opposition Jharkhand Mukti Morcha (JMM) also questioned Kundan Pahan's surrender.
"Kundan Pahan has been portrayed as Robin Hood by the state government and the police. The way his surrender was publicised, it seems there is a hidden agenda of the state government behind the surrender of Kundan Pahan," JMM General Secretary Vinod Pandey said.
Jharkhand High Court has also taken cognisance of the development after the Advocate Association questioned the state government's scheme in which the cash reward for the capture of a Maoist is given to them after the surrender.
The association said public money is being misused in this manner.