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He was 67.
Chhajed was Minister of State for Tourism in the Sushilkumar Shinde state government in 2003.
Chhajed's son Anand is a Congress corporator in Pune.
Condoling his demise, Maharashtra Pradesh Congress Committee (MPCC) president Ashok Chavan described Chhajed as a staunch Congressman committed to the ideals of the party.
"Rising from the ranks as a youth leader, Chhajed went on to become Mayor, legislator and minister," Chavan said.
Chhajed served the party as a state unit general secretary and co-ordinator of the Congress Legislature Party till the last, he added.
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