GGTS on Ubuntu 14.04 - Cannot run Grails run-app

Question

GGTS 3.6 is behaving very strangely on my Ubuntu. I have installed GGTS and if I start it from terminal, all is fine. I also have a desktop shortcut for my GGTS added. If I launch from the Unity launcher using my desktop shortcut, GGTS is unable to find proper Java. It is giving the below error.

 |Loading Grails 2.4.3
    |Configuring classpath
    .
    |Environment set to development
    .................................
    |Packaging Grails application
    ....................................
    |Running Grails application
    Error |
    Exception in thread "Thread-7" 
    Error |
    java.io.IOException: Cannot run program "/lib/jvm/java-7-oracle/jre/bin/java/bin/java"
 (in directory "/home/halley/Documents/workspace-ggts-3.6.1.RELEASE/Test"): 
error=2, No such file or directory

Any help on this strange behaviour? My JDK is installed at /usr/lib/jvm/java-7-oracle

I am still wondering how GGTS is picking this --> /lib/jvm/java-7-oracle/jre/bin/java/bin/java

echo $PATH
/home/halley/.gvm/vertx/current/bin:
/home/halley/.gvm/springboot/current/bin:
/home/halley/.gvm/lazybones/current/bin:
/home/halley/.gvm/jbake/current/bin:
/home/halley/.gvm/groovyserv/current/bin:
/home/halley/.gvm/groovy/current/bin:
/home/halley/.gvm/griffon/current/bin:
/home/halley/.gvm/grails/current/bin:
/home/halley/.gvm/gradle/current/bin:
/home/halley/.gvm/glide/current/bin:
/home/halley/.gvm/gaiden/current/bin:
/home/halley/.gvm/crash/current/bin:
/home/halley/bin:/usr/local/sbin:
/usr/local/bin:
/usr/sbin:
/usr/bin:
/sbin:
/bin:
/usr/games:
/usr/local/games:
/usr/lib/jvm/java-7-oracle/bin

echo $JAVA_HOME
/usr/lib/jvm/java-7-oracle