The main opposition Congress has demanded a high-level probe and resignation of Brijmohan Agrawal.
However, Agrawal has dismissed any wrongdoing, saying the land was purchased from a farmer and everything was done according to rules.
Lalit Chandranahu, a farmers' association leader, today said he had complained to the authorities demanding action in connection with the purchase of nearly 4.12 hectares of land in the name of Agrawal's wife Sarita in Jalki village.
He claimed the plot in question was a part of the total 61.729 hectares of land which was given to the forest department by the WRD against the forest land submerged in an irrigation project in Mahasamund.
"Later, some forestation work was done on the land by the (Forest) department. However, the possession (ownership) of the land was not changed in the Revenue records of Patwari," he said quoting the documents.
"In 2009, the land was sold to Sarita Agrawal, the wife of Brijmohan Agrawal, a native of Ramsagar Para (Raipur), by other donors. Now a resort is being developed on the land, located near Sirpur, a historical Buddhist site," he said.
He said he had complained to Mahsamund collector last year.
Mahasamund Collector Himshikhar Gupta today said the district administration had formed a three-member inter-departmental committee to make recommendations and it found that the land in question was donated by farmers, but its mutation was not done.
The committee, which held a meeting last month in this connection, will now make suggestions on the future course of action, the collector said.
Mutation is the change of title ownership from one person to another when the property is sold or transferred.
When contacted, Agrawal said the charges levelled against him are "politically motivated".
"We bought the land from the farmer based on the revenue records, as per the rules. I had mentioned the property registered in the name of my wife in my election affidavit (during the last Assembly polls).
Meanwhile, state Congress chief Bhupesh Baghel demanded a probe by a national agency into the land deal.
"The issue (referring to the land deal) needed to be probed by national agencies," Baghel said and demanded Agrawal's resignation.
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