Krishna Bahadur Nepali, 38, of Shivalaya VDC of the district died while he was undergoing treatment at Parvat District Hospital at Kushma, said police.
Nepali, who had been working in the Nepal Army at Kalijung Batallion, Birgunj, was on leave.
Madhes-based leader Rajendra Mahato's newly formed political party, Rastriya Mukti Party Nepal, has been officially registered with the Election Commission (EC).