Some domain name which i do not own is pointing to ipaddress of my server.
Why would somebody want to do that and how would i stop it?

"Your" server? You have not said anything about who owns and operates
the physical server in question, but is it possible that the entity
(hosting service?) that operates this server is allowing several of
its clients to share the same IP address? That is not uncommon.
Therefore, your domain name and the other domain name might very
properly be pointing to the same IP address, yet a Web browser asking
for the content of each of those domains would be fed different
content, the content properly associated with each domain.

Otherwise, I suggest contacting the hosting service of the other
domain and ask for an explanation. You may be able to locate that
service by running a WHOIS with the registrar of that domain name.

Thanks for replying.

I own the physical server and i operate it.

i already looked up the 'who is' info and sent email to the tech and
admin
contact. i did not get any response yet. Owner of the domain and its
host is from a different country.

what can i do if they dont reply and change their false DNS entries?
is there any governing agency for these kinds of situations.

ICANN (The Internet Corporation for Assigned Names and Numbers) at
  http://www.icann.org/
might be a good place to start. It does have a dispute resolution
procedure for domain name disputes, but that is not your problem.

You might also contact the registrar of the domain name in question. 

I wonder whether there is anything improper about what you allege the
other party is doing. Anyone could create a Web site that consisted of
nothing but a default name that redirects to your site's default page.
That is not very different from what you describe.

False DNS entry is different from redirecting to another website.
i am suspicious that they wanted to use my server for SPAM or for any
other stuff, which i would like to know and stop.

I know exactly what you're talking about.  Someone has registered a
domain using your primary and/or secondary nameservers without your
permission.  Depending on where they registered the domain, there
should be some kind of guidance for you there.  For instance, NetSol
used to say that you have the option of billing them for using your
nameservers in their registration.  In any case, they cannot send spam
through you or anything like unless you set up a zone for them. 
There's not a lot you can do about the squatter unless you can contact
them and either have them change their registration or sell them your
hosting service (if you have one).  Your dns server just has to do the
work whenever an Internet user seeks that domain.

In the past, when I've had people register domains using my
nameservers without permission, I set up a zone pointing to my own
site.  Just make sure you have a policy that supports that kind of
action.