NHRC Chairperson S Rajendra Babu said, in 2005-06 the fake encounters had increased to 157 from 122 cases in 2004-2005.
The previous year 100 cases were registered.
Severely condemning the trend, Justice Babu said the Commission will not tolerate any form of ''state terrorism''.
''We live in a democracy and a state cannot perpetuate any form of terrorism on its people. It will not be tolerated,'' he added.
The Chairperson said last year the Commission had received more than 74,000 complaints of human rights violations across the country.
Uttar Pradesh, once again got a dubious distinction, with the maximum complaints -- almost 44,560 -- of violations being reported from the state.
Delhi and Bihar figured second and third on the list, the Commission said.
During 2006-07, as many as 1,596 custodial deaths were reported.
Addressing a press conference after a three-day NHRC 'Camp Sitting' in Patna, Justice Babu expressed satisfaction over the human rights situation in Bihar.
As many as 30 cases of the Full Commission and 125 cases relating to Single Members were disposed of during the three days.
''On consideration and disposal of the cases, the State Government made payment of Rs 7.60 lakh to the victims of violation of human rights in six cases and submitted proof of the payment. This includes two cases of custodial deaths wherein Rs one lakh each was paid to the next of kin of the two deceased,'' the Chairperson said.
The Commission said primafacie human rights of citizens had been violated in 19 cases.
After the three-day camp sitting, on May 20, the Commission held a regional review meeting with the Chief Secretaries and DGPs of Bihar, West Bengal, Orissa and Jharkhand.
A detailed discussion on the status of compliance to the recommendations given by the NHRC on several issues, including Juvenile Justice, prisons, trafficking of women and children, manual scavenging and right to health and education, were deliberated upon.
It expressed concern over poor compliance by the States of West Bengal and Orissa.
Expressing concern over trafficking of women and children, the Commission called for appointing special officers to sensitize police personnel and also work out a systematic programme for rehabilitation of such victims.
''Bihar, Jharkhand and Orissa are the place of origin for trafficking whereas West Bengal is the destination,'' it observed.
The NHRC asked for greater alertness at the place of origin to protect women and children from becoming victims of trafficking.
About eradication of manual scavenging, it directed for resurvey by an independent agency in all these states.
The Commission also emphasised on an effective rehabilitation and reintegration programme to bring manual scavengers into the main stream.