What I heard from my friends in KTM is the story as following:
The NEA official got calls from someone claiming to be maoists demanding 1 lakh rupees to be handed at a particular place and time.
The officer contacted police and the police made a plan. He will got to that place and hand the person (claiming to be maoist) bogus money (made up of paper). Innocent officer went to the place with the bogus note and a young man came and even before confirming weather the guy is the one asking for money, police started firing and ultimately killing both the Nepal Electricity Officer and the suspected (but not sure) maoist asking for money. Pay attention to the line "The security force unit opened fire when Vaidya was handing over a bundle of fake notes to Adhikari, believed to have come to collect the amount.". So even police wasn't sure if the guy was the one and still they had time to lodge 12 bullets into him and the officer who went to the spot as per their plan was also killed by the police.
Another classical example of innocent Nepalese being killed between this political fight between police and maoists.

The news is as following:

KOL Report

KATHMANDU, July 14 - Ullash Vaidya, a senior official of the Nepal Electricity Authority, was accidentally killed Tuesday at 8:30 pm at Old Baneshwor in the capital when an operation to nab a suspected Maoist collecting donations went awry.
Krishna Adhikari, the suspected Maoist, employed at Madhyanha ý a Nepali-language afternoon daily ý was also killed in the incident.
According to security sources, the security team reached the area in order to capture Adhikari, who had been asking for donations from Vaidya for some days.
The security force unit opened fire when Vaidya was handing over a bundle of fake notes to Adhikari, believed to have come to collect the amount.
An eyewitness said that he heard gunfire while he was having dinner in his room. "When I came out, I saw Adhikari lying on the road," he said.
Locals in the area took Adhikari, to the Kathmandu Medical College at Sinamangal, where he died while undergoing treatment at 9:00 pm.
Adhikari received over a dozen bullets in the chest, waist and other parts of his body while fleeing on his motorcycle.
Adhikari, resident of Tuche VDC-1 of Nuwakot district, was a 10+2 student of Capital College and Research Center in Kalimati. (dds)