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It is suspected that he was kidnapped by members of a rival gang who fled from the spot soon after committing the murder.
The deceased has been identified as C M Muhthasim, alias Don Tasleem, a native of Kasaragod in Kerala.
He was wanted in many criminal cases.
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Tasleem had been released on bail from the Kalaburagi prison on January 31 and was returning to his native place when unidentified assailants kidnapped him.
He was imprisoned after his arrest in a jewellery robbery case registered at a police station here.
Police suspect that the rival gang may have waylaid him soon after his release from prison and took him to Bantwal.
The locals, who grew suspicious about the car that had been parked at the spot, informed the police and found the body.