An army officer was dismissed and another lost five years of service after a court martial found them guilty of taking photographs of civilians posing as dead terrorists and giving them to their seniors in a bid to get gallantry awards.

Colonel H S Kohli, commanding officer of an artillery regiment, splashed tomato ketchup on the civilians to make them look like bloody corpses at Bada Nagadun near Silchar in Assam in 2003, an army spokesman said in New Delhi on Friday.

The fraud was discovered when the claim was being processed, following which court martial proceedings were launched against him.

At the end of the proceedings, Col Kohli was dismissed and a major, whose name was not revealed, slapped with five years' loss of service and a severe reprimand for conniving with him.

"The two were found guilty of reporting an encounter which had not taken place," the spokesman said.

Kohli became the first army officer to be dismissed for faking an encounter.

It is the second instance in which army officers fabricated encounters to win medals for themselves and their units, after the Siachen fake killings.

The court martial proceedings on the Siachen episode are still continuing.