The Lieutenant General was found to be guilty on the charges of issuing a no-objection certificate to the builder and singed an MoU without informing the Command Headquarters.
Pratap Kumar, the Lieutenant General's brother said an appeal will be made in the Supreme Court against the court martial.
"We are a democracy and are not run by martial law. We're Indians and every Indian citizen has a right to seek final justice from the Supreme Court," he said.
A court inquiry was ordered in the case earlier and it found Lt Gen Rath, Lt Gen Awadesh, a retired military secretary and ex-commander of the 33 corps were found guilty in the case.
A no objection letter was issued by Lt General Rath to a developer to build a 71-acre land next to the Sukna military station in Darjeeling in Dec 2009 even after his officers objected to the sanction. He issued the certificate without even informing Army Headquarters or Eastern Command.
Lt Gen Prakash, who was the military secretary then had influenced Lt Gen Rath to issue a no objection certificate to the private builder, to Dilip Aggarwal, who on false grounds claimed that he would set up a Mayo college affiliated college in Sukna.
The issue came into light after Ramesh Halgali, the then Major General spilled the beans to the Eastern Army Command about the no objection certificate.
Despite of that, the then Army Chief, Deepak Kapoor buried the matter and criticised Lt Gen Ramesh Halgali and other officers who brought the issue into light.