In a letter to Mr Singh, who was elected the assembly speaker earlier this week, the commander of Nagrota-based 16 Corps says the under-construction building is a "potential safety hazard" for the army's ammunition depot located nearby.
"The construction is in violation of Works of Defence Act (WoDA) 1903 as also Government of India, Ministry of Defence notification dated 26 September 2002," wrote Lt General Saranjeet Singh.
The letter written in March also says the construction on a half an acre area violates a notification issued by the Jammu district administration that "construction activity within 1000 yards of the boundary wall of 4 ASD (ammunition depot) has been prohibited".
According to the letter, accessed by NDTV, the building is being constructed approximately 580 yards from the boundary wall of the ammunition facility.
The building "has implications on the security of a major ammunition storage facility as well as the safety of all personnel living in close vicinity of the ammunition depot", wrote Lt Gen Singh.
Rejecting the allegations, Nirmal Singh said the issue is "politically motivated".
The land was bought in 2014 from Himgiri Infrastructure Development Pvt Limited, a company whose shareholders include Deputy Chief Minister Kavinder Gupta and BJP lawmaker from Jammu Jugal Kishore.
The construction was noticed in October last year, said the army's letter, adding that efforts made with the civil administration and the police to stop the violation has not "yielded positive results".
The issue has given the opposition National Conference fresh ammunition to hit out at the ruling BJP. Former chief minister Omar Abdullah tweeted, saying the Defence Minister's colleagues are "endangering national security".
Would @nsitharaman sahiba be reacting to the report by the army that her colleagues are endangering national security in #Nagrota? Was she even asked about this when she was addressing the press on behalf of her party?— Omar Abdullah (@OmarAbdullah) May 13, 2018
Locals say the army built the ammunition depot after acquiring land in 1962. Those having land within the 1000 yard construction-prohibited zone say they have long been demanding that the depot be shifted.
"This land belongs to us, where will we go, they should take off the depot from this place," said Shashi Pal, a local resident.
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