Police say Sahu was accused of committing several crimes including dacoity, murder, robbery, attack on villagers, government officials and properties. However, human rights activists describe the allegations against him as false and allege he was framed for opposing the Posco project.

Posco, one of the world's biggest steel makers, signed a deal with the Orissa government in June 2005 to set up a $12 billion plant near the port town of Paradeep in the coastal district of Jagatsinghpur, some 100 km from here, by 2016.

There has been no significant progress since then in the project, the largest foreign direct investment in India, due to local opposition.

Over 20,000 people from around 15 villages, including Dhinkia, Gada Kujanga and Nuagaon, are protesting the project, saying it will displace them and ruin their betel leaf farming. Posco, however, says the proposed plant would affect only 500 families but create thousands of jobs instead.