Taking a serious note of the "planned mischief", the state government tonight ordered a magisterial probe and registration of a case into spread of the rumour, which was picked up by the national media, particularly the TV channels.
The government is contemplating slapping of the Public Safety Act (PSA) against the culprits.
The "rumour" about the bus falling into a gorge emanated during the day after which the district administration, the police, the Army, the Airforce and several other agencies were ordered to initiate rescue and evacuation.
Deputy Commissioner of Rajouri Shahid Iqbal Choudhary "ordered a magisterial probe into the incident of rumour spread on social media about bus accident causing death of more than 40 students near Chhatapani in Poonch," an official release said.
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"The magisterial enquiry was ordered after preliminary verification revealed involvement of some people who circulated the unverified news on WhatsApp groups on twin districts which was also traced to a private school and some news groups," Choudhary said.
The rumour spread by "credible persons" on social media groups and the media led to high alert in the twin border districts of Poonch and Rajouri.
More than a dozen vehicles, including ambulances, were rushed from Rajouri to the reported spot of accident while a similar effort was made by Poonch districts as well, it said.
"Officers of the district administration contacted the owner of private school in Manjakote and thereafter the driver of vehicle which was reported to be safe and on way back within hours after report of accident was spread," the statement said.
Additional District Magistrate Mumtaz Ali will conduct the probe to identify the persons involved in this "planned mischief" which spread in electronic and social media like a wildfire, it said.
Choudhary said more than a dozen people have been shortlisted for initial questioning to trace the originator(s) of the rumour.
The DC said the persons involved in "spreading such a serious kind of rumour are definitely guilty" of disturbing security of the state and law and order.
"Such practices, if not controlled at this stage, could take alarming proportions to cause irreparable damage over controversial issue," he added.
A report has also been sought from the intelligence agencies in this regard.
Police are lodging an FIR in the matter, he said.