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Ganesh (50) from Odisha was engaged in a construction work near the Katapady-Shirva road.
Sources said the two labourers had engaged in a fracas over some work-related issue on Monday night. Ganesh was seriously injured in the clash that followed. Though he was rushed to hospital by fellow-labourers, he died on the way.
The accused labourer is absconding and the police have launched a search for him, they said.