The deceased was identified as Kolagani Rakesh and the brutal incident took place on the outskirts of Chelgal village, nearly 10km from Jagtial town, at about 3.30 pm, said Jagtial Deputy Superintendent of Police M Rajendra Prasad.
The 26-year-old was travelling in a car along with a friend, identified only as Jani, when four persons chased them in two other cars, he said.
The unidentified assailants stopped the car and attacked Rakesh with iron rods. One of them pulled out a sword and cut off his dead, the police officer said, adding they also threatened Jani and fled from the spot.
On a complaint filed by his father, a case of murder was registered against one T Srinivas, a resident of Govindupalli village, and some other locals.
"Though the motive is not clear yet, we suspect land dispute between the deceased and Srinivas led to the murder," the DySP said.
"Out of the two cars used in the crime, one has been seized," he said.
Efforts are on to arrest the attackers, Prasad added.
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