He was declared brought dead by doctors at a government hospital here.
Munda's family members alleged that he was beaten to death in custody. However, the police denied the allegation, claiming that he committed suicide by using a bed sheet.
Following the death, a mob attacked police personnel, ransacked the police station and set on fire vehicles parked in its premises. They also burnt documents inside the station.
The police said that many of its personnel posted at the police station were injured when the protesters resorted to stone-pelting.
Munda's family members also staged a road blockade before the police station.
Director General of Police (DGP) R P Sharma said, "Three police personnel, including the inspector-in-charge of the police station, have been suspended on charge of negligence."
"If any policeman is found responsible, he will not be spared," the DGP said, adding that the police had arrested Munda last night and kept him in the lockup where he used a bed sheet to hang himself.
He said that the Superintendent of Police (SP) and the District Magistrate of Sambalpur have been asked to submit a report within 24 hours.
The ADG of the Human Rights Protection Cell (HRPC) has been asked to go to the area, Sharma said.
Inspector General (IG) of Police, Northern Range, Sushant Nath, said, "Munda was found hanging in the lockup and declared dead after he was taken to hospital.
Nath along with Sambalpur SP Sanjeev Arora visited the police station.
The IG appealed to people to maintain peace and not to take the law into their hands.
Chief Minister Naveen Patnaik expressed grief over the incident and announced an ex gratia of Rs 5 lakh for the next of the kin of Munda.
Opposition Congress and BJP targeted Patnaik, who also holds charge of the Home department.
"The chief minister, who is also the Home minister should be accountable for the death of a tribal man in police custody," Congress leader Narasingha Mishra said.
Mishra alleged that law and order had completely collapsed in the state. "When the people attack a police station, where is the law and order?" he asked.
BJP national general secretary Suresh Pujari, in a press conference, demanded a CBI probe into the incident and alleged that the state police may not give justice to the victim's family.
"The chief minister should quit the Home portfolio as he has failed to manage the department. Patnaik should announce an ex gratia of Rs 25 lakh for the victim's family," Pujari said.
The Odisha Human Rights Commission (OHRC) has directed the ADG of the HRPC and IG, Northen Range, to enquire into the alleged custodial death and submit a report to the commission.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)