I was able to resolve this issue by removing intel grahics installer.
Here are the steps I followed:

1) In additional drivers, select nouveau as default driver.

2) Purge nvidia using following command:
sudo apt-get purge nvidia*

3) Completely remove intel graphics installer and files instaleld by it
using following guide:

http://theclonker.de/?p=89

replace quantal with trusty.

4) When you purge intel driver i915*, on next reboot an older version
might get activated so remove it as well. Simply install synaptic and
search "i915" and uninstall if any old version is activated. Restart
after that.

5) Enable nvidia driver again in additional drivers. It should work
fine!

Now I am using xorg edgers repository and have installed nvidia 340.58
driver. It performs much better than nvidia 331 so I will highly
recommend it.

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You received this bug notification because you are a member of Ubuntu
Touch seeded packages, which is subscribed to upstart in Ubuntu.
https://bugs.launchpad.net/bugs/1369216

Title:
  gpu-manager: /etc/modprobe.d is not a file

Status in “upstart” package in Ubuntu:
  Confirmed

Bug description:
  Get these lines logged into gpu-manager.log, on that fresh stock
  installation

  /etc/modprobe.d is not a file
  update-alternatives: error: no alternatives for x86_64-linux-gnu_gfxcore_conf

  ProblemType: Bug
  DistroRelease: Ubuntu 14.10
  Package: upstart 1.13.2-0ubuntu1
  ProcVersionSignature: Ubuntu 3.16.0-14.20-generic 3.16.2
  Uname: Linux 3.16.0-14-generic x86_64
  NonfreeKernelModules: nvidia
  ApportVersion: 2.14.7-0ubuntu2
  Architecture: amd64
  CurrentDesktop: GNOME
  Date: Sun Sep 14 08:42:45 2014
  ProcKernelCmdline: BOOT_IMAGE=/boot/vmlinuz-3.16.0-14-generic 
root=UUID=7c755ed6-51cc-4b75-88ac-9c75acf82749 ro
  SourcePackage: upstart
  UpgradeStatus: No upgrade log present (probably fresh install)
  UpstartBugCategory: System
  UpstartRunningSessionVersion: upstart 1.13.2
  UpstartRunningSystemVersion: init (upstart 1.13.2)
  modified.conffile..etc.default.whoopsie: [modified]
  modified.conffile..etc.gdm.Init.Default: [modified]
  mtime.conffile..etc.default.whoopsie: 2014-08-29T19:12:47.435075
  mtime.conffile..etc.gdm.Init.Default: 2014-09-07T17:01:23.246055

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