That happens with both my lammps versions viz. 24Sept07 and 26Jun08
Since my minimizer minimizes energy from e8 to e2, does it mean that its
working fine, even if I am not including ftol in my arguments (and thus
making it only 3 arg input as written below) as needed?
I think so, yes. The syntax of the minimize command has changed from what it used to be. I know that when I've used a recent copy of LAMMPS (not sure if its the *most* recent version at the moment), using the old 3 arg input made it complain about "illegal minimize command," so I seem to have a mirror image of the problem that you have.
I'd recheck whether the 26Jun08 version has the same problem as the 24Sept07 version. That doesn't look right to me.