The accused Basant Jena had given the sum as loan to Subodh Mohanty. However, Mohanty did not pay him the sum despite repeated reminders, the police said.
Irked over it, Jena who ran a chicken shop in the village had stabbed Mohanty to death at the deserted canal road of the village, they said.
The body of the deceased was recovered on November 26 and Jena was arrested. The accused has confessed to the crime, police said.
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