The court absolved Narender Singh, who was an assistant financial advisor in the defence ministry and was later suspended, of charges under the prevention of corruption act.
It said the evidence produced by CBI was "not sufficient enough" to convict Singh in the case.
"There is nothing on record file to show that Narender Singh had, at any point of time, given any favour or disfavour to any person so as to attract Section 7 of the Prevention of Corruption Act," Special CBI Judge Ramesh Kumar said.
"Further, there is nothing on the record file to show that he had taken any gratification for exercising personal influence to show favour or disfavour to any person. Since, there is no demand on behalf of the accused, no criminal misconduct can be imputed to him. No criminal liability can be fastened in the absence of positive demand by the accused, Narender Singh from Mathew Samuel," the court said.
According to CBI, Singh had accepted illegal gratification of Rs 10,000 in 2000-01 as a reward from Mathew Samuel, correspondent of news portal Tehelka.com, for showing favour to him and his fictitious firm M/s West End International for facilitating and placing of order in favour of his firm for procurement of defence equipments like Hand Held Thermal Imagers.
CBI alleged that Singh had taken illegal gratification for showing favour to Samuel and his firm by inducing his higher authorities by exercising his personal influence.
Samuel, deposing as a prosecution witness, said he was associated with Tehelka.com and had carried out a sting called 'Operation Westend', in which fictitious firm M/s Westend International was created to expose how 'suitcase people' or middlemen were compromising Indian defence.