Chief Minister Devendra Fadnavis holds the Urban Development portfolio, and "people were eager to know" what action he would take against Mr Deshmukh, Mr Munde said.
Congress spokesperson Sachin Sawant said Mr Deshmukh's alleged illegal construction was a "glaring example" of corruption under the current government.
Mr Deshmukh should be sacked immediately, he demanded.
"I will resign if I am found guilty. If my bungalow turns out to be illegal, I will myself demolish it," he said.
According to the purported report, copies of which were circulated to media, the municipal commissioner has stated that permissions granted for the construction were not proper, and the land was reserved for a fire brigade station.
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