In 2011, a court martial had found Rath guilty in the alleged scam for issuing a 'no-objection certificate' to a private builder for building an educational institution on a 70-acre plot adjacent to the military cantonment in Sukna in West Bengal.
The land deal came into the open in mid-2008 when former Army Chief Gen V K Singh was the Eastern Army Commander and had initiated the court of inquiry in the alleged land scam.
"The petitioner is acquitted of all charges. He is entitled to restoration of all benefits with 12 per cent interest," an Armed Forces Tribunal bench headed by Justice Sunil Hali said in its judgement.
The bench said the petitioner suffered undue harassment and loss of reputation by the act of the respondents which, if not compensated, would be a travesty of justice.
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The Tribunal allowed Rath's petition in which he had alleged that Gen V K Singh had given "undue importance" to the case as he had a "serious grudge" against the then Military Secretary Lt Gen Avdesh Prakash whom he held responsible for obtaining a commitment from him on the issue of his date of birth, which stood in the way of his extension of tenure as the Chief of the Army Staff.
"As a matter of fact, some of them have been promoted by the Chief of Army Staff, which was done after their statements were recorded by the General Court Martial, after setting aside their sentences," the tribunal said.