The incident occurred at Gadadharprashad village under Itamati police limits in the district last night.
The accused has been identified as Laxmidhar Rout, a native of Govindpur village while the victim has been identified as Ramesh Muduli.
As per reports, Laxmidhar had borrowed a hand loan of Rs 20,000 from Ramesh but couldn’t return the borrowed money in time.
On Friday evening, a verbal spat broke out between the two when Ramesh asked Laxmidhar to pay back the loan amount.
The verbal spat turned ugly when Laxmidhar attacked Ramesh with a sharp weapon and escaped from the spot
Ramesh, who sustained severe injuries in his chest, was rescued in a critical condition and rushed to the District Headquarters Hospital here where he died while undergoing treatment.
On being informed, Itamati police reached the spot and initiated a probe into matter.
A manhunt has been launched to nab the accused person. Further investigation is underway, a police officer said.