A senior police official said the encounter took place in Budha Pahad jungle near Lavadih village after the Maoists shot at a villager and abducted two others, including a woman.
Security forces reacted promptly on getting the information and reached the place.
"The injured person, identified as Kukku Mochi, was shot on his waist. He has been admitted to Sadar Hospital here. The two abducted persons were released by the Maoists as the activists were fleeing towards the neighbouring state," Superintendent of Police Parvez Akhtar said.
The three-hour-long encounter started in the morning. A self-loading rifle used by Maoists has been recovered from the area.
The Maoists had shot Mochi and abducted two others while several villagers were collecting firewood in the forest area.
The extremists had banned the entry of villagers in the forests since June 20 as they were holding their sub-zonal meeting in the Budha Pahad forest area.
