Supporting the trial court's decision, the agency told a bench of Justice Siddharth Mridul that he had misused his official position by indulging in "corruption".
"The applicant (Thungan) despite being at a responsible position as the minister of state indulged in corruption and caused undue pecuniary loss to the state exchequer...," the CBI said in their affidavit.
The agency submitted that the accused had extended "huge pecuniary advantage to the other accused" in the case.
Thungon, also a former chief minister of Arunachal Pradesh, was convicted by the trial court for offences under section 120-B (criminal conspiracy) of the IPC and under provisions of the Prevention of Corruption Act.
The trial court had also imposed a fine of Rs one lakh on Thungon who is presently lodged in Tihar Jail here. It had acquitted two other accused -- Lakhpa Tsering and Krishna -- in the case.
Thungon was the Minister of State for Urban Affairs and Employment at the time of the alleged offence when the government at the Centre was led by P V Narasimha Rao.
The court, however, had found Kaul guilty in the case for conspiring and committing the illegal act.
CBI had registered a case in 1996 against Kaul, Thungon, Tsering, Krishna and Balodi for allegedly hatching conspiracy in allotting shops and stalls in 1994.
According to CBI, the five accused had allegedly conspired during September 1993 to June 1994 for dishonestly and fraudulently obtaining undue benefit in the allotment of shops on economical licence fee basis in contravention of rules governing such allotments.
In July 2015, Thungon was awarded a four-and-a half-year jail term by a trial court here in a separate graft case of 1998 relating to misappropriation of funds.
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