Allegations are being made that she testified in favour of the former IPL chief's British immigration application in 2011.
"Of course I know the family. I have always known them...(But) I do not know what documents they are talking about," she said.
Asked if there was a media trial against her, she said "that is left for you to decide."
The revelation apparently was made in a statement released by Lalit Modi's legal team where it is mentioned that Raje, who was then leader of opposition in the Rajasthan assembly, said she was in favour of Lalit Modi's immigration application on the strict clause that her name will not be revealed to the Indian authorities.
"This witness statement is provided on the strict understanding that its contents and the identity of its maker are treated confidentially and that it is used only for the purposes stated in it," says the Confidentiality Notice dated August 18, 2011, purported to be Raje's witness statement.
"I make this statement in support of any immigration application that Lalit Modi makes, but do so on the strict condition that my assistance will not become known to the Indian authorities."
The letter was part of the documents mailed to news channels on Monday night by a PR firm engaged by Lalit Modi's lawyer Mehmood Abdi.
The documents are being circulated on social networks by the media.
Congress leader Digvijaya Singh told a news channel: "There is no option for Vasundhara Raje but to resign."
External Affairs Minister Sushma Swaraj is caught in the midst of a controversy for helping Modi, former IPL commissioner who is charged with financial impropriety, with travel documents. Sushma Swaraj admitted she helped Modi on "humanitarian grounds".
The episode has caused huge embarrassment to the government as Modi is wanted by the Enforcement Directorate for financial bungling in the money-spinning IPL.
He has been living in London since 2010 after the ED issued a blue corner notice against him, which aims to locate, identify or obtain information on a person of interest in a criminal investigation.
(With inputs from agencies)