Shekhar, 35, was shot dead in Ravankila area, over 300 km from here. Twelve people have been booked.
The victim forcibly took possession of some students' books to force them to pay the fees of Rs.2,000, police said.
After an argument, the students pelted stones at his house and fired at him killing him on the spot, Senior Superintendent of Police Piyush Mordia told IANS.
After shooting Shekar, the accused threw acid on his brother Ajay and mother Nandita, police said.
A police complaint has been registered against students Akash, Ravindra and 10 others.