The councillor, Suresh Bhagat, was shot at from point blank range at around 1930 hours at his office at Camp One with his followers, Durg Additional Superintendent of Police Sanjeev Shukla said.
Bhagat was killed on the spot whereas his friend, who suffered serious injuries, was rushed to a hospital, he said.
Bhagat represented Ward number 19 in the BMC.
Country-made pistols were used in the attack, police said adding the incident could have been the result of an old enmity.
Apprehending a law and order problem following the murder, police has beefed up security throughout the industrial township, the official said.
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