The move, however, was strongly opposed by the Jammu and Kashmir Dharmarth Trust which termed it as "an unfortunate attack on minority religious institutions and its properties".
The department found that the Trust used a forged report and leasedout a 75-acre government land to seven private businessmen at a cost of Rs 2.90 crore.
A case has been registered against Sachin Dev Singh, then assistant commissioner revenue, Jammu, other officials of the revenue department and members of the Dharmarth Trust.
Vigilance department officials carried out searches at several locations in Jammu and Rajouri and seized documents related to the case, the spokesman added.
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In a statement, issued tonight, the Jammu and Kashmir Dharmarth Trust strongly opposed the the State Vigilance Organisation (SVO) action, saying the act seems to be an unfortunate attack on minority religious institutions and its properties.
"The act of defamation against the ancient Dharmarth Trust created by ex-rulers, the Maharajas is believed to be based on false information and instigated by those having certain vested interests in creating this controversy", a Trust spokesperson said.
Refuting the allegation as "unlawful", the spokesperson said that the SVO or other authorities concerned should have at least gone through the basic facts and existing laws and regulations before initiating such actions.
"The land property at Nandani, near tunnel, is purely proprietary of Jammu and Kashmir Dharmarth Trust from the period of Maharajas," he said.
This property stands granted to Rani Pathani wife of late Raja Ram Singh and the same was subsequently transferred to Jammu and Kashmir Dharmarth Trust Department in 1935 through a royal command by Maharaja Hari Singh and has been managed and controlled continuously till date by the Trust, he added.
"Keeping in view these facts, including J&K High Court Division Bench judgement, the Dharmarth Trust refutes these allegations and believes that the action by the SVO and other departments in unlawful, the spokesman said in the statement.
He said that the trust shall take all necessary legal measures to protect its interests in this regard.