The encounter, which took place in the jungles of Silger, a "liberated" Maoist zone between the naxal hotbed of Jagargunda and Basaguda in Dantewada, was launched last night by the CRPF from three directions.
Two Maoists have also been arrested after the encounter.
The encounter is significant as this is the first time that the central force has recovered these many bodies of Naxals. The arrested Maoists have been airlifted to the state capital Raipur.
Official sources said six CRPF men, including two CoBRA commandos, have sustained bullet injuries and they have been air-lifted for medical aid.
Preliminary reports suggest that the casualty figures of the Naxalites could increase as information from deep inside the jungles is trickling in slowly.
This is the same area, close to Chintalnar, where Naxals have carried out the biggest ever attack on security forces killing 75 CRPF men and one state police personnel in April 2010.
According to the sources, the CRPF has mobilised three units of commandos and regular troops, aided by two helicopters for the encounter.
Firing is still on and the force has rushed in additional troops and logistics to the area in the wee hours today.