Two other police officers were also injured in the gun-battle which continued for around an hour.
The clash broke out when police was conducting raids at Tukvar near Patlaybas to arrest Gurung, who has been in hiding after being booked on several charges, including under the Unlawful Activities (Prevention) Act. They have also recovered explosives such as crude bombs and local pistols. "He is now trying to move to Sikkim again", said Sharma.
"We will not allow this to happen at any cost, even if we have to make sacrifices", he said. But Gurung has told local media he will address his supporters on October 30, urging local people to take to the streets on that day.
"Last night (Thursday), we received specific inputs that Gurung was camping on the river bed below Lepcha Bustee along with boys of GJM's militant wing Gorkhaland Personnel, and that there were lot of arms and ammunition there", said Darjeeling's Superintendent of Police Akhilesh Chaturvedi.
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He lauded Prime Minister Narendra Modi for bringing the global community on board on the issue of terrorism. He also termed terrorism as a "curse" that no civilised country can accept.
State tourism minister Goutam Deb said, "We strongly condemn such an attack on the police".
Inspector General of law and order, West Bengal police Anuj Sharma said that Gurung and his associates fled during the police operation.
Early on Friday, police raided the area. The GJM chief has vowed that the shutdown in the hills would continue indefinitely.
This incident was the second casualty the police suffered in tackling the unrest in the Hills in recent times. Earlier, a civic police volunteer had died of injuries sustained in a low-intensity blast near the Kalimpong police station.