Jammu, Mar 4 (IANS): Seven kg of heroin, cash worth Rs 2 crore, $15,000 and a pistol were recovered from the house of a drug peddler in Jammu and Kashmir's Poonch district.

ADGP (Jammu), Mukesh Singh told reporters that a major narco-terror module was busted in the border district of Poonch late Friday evening.

The recovery was made from the house of a notorious drug peddler, Rafi Dhana alias 'Rafi Lala', who was recently detained under the Public Safety Act.

He belongs to Danna Doyiyan village in Mandi area of Poonch district.

Poonch Police along with personnel of the National Crime Agency and the CRPF raided the house of the drug peddler near the line of control (LoC) on specific information leading to the recovery of seven kg of heroin, more than Rs 2 crore as cash, $15,000 and a pistol with one magazine, 10 pistol rounds and seven rounds of self-loading rifle.

"The searches are still going on in presence of the magistrate and prominent citizens. The nexus of this module with Punjab-based narcotics smugglers is being investigated," the ADGP said.

He also added that there have been reports that drugs smuggled from Pakistan and Pakistan-Occupied Jammu and Kashmir (PoJK) through the LoC and international border were being smuggled to Punjab and proceeds generated from the illegal trade used for spreading terrorism in the Valley and other parts of the union territory.

Police is trying to ascertain the source of cash and the persons for whom it was meant. A case has been registered at Mandi police station in Poonch district and further investigation is going on, Singh said.