Former chief minister Lalu Prasad Yadav, a current member of India's Parliament, was sentenced to five years in jail and ordered to pay a $40,000 fine for embezzling funds intended to buy food for cattle during his tenure as Bihar's top elected official in the mid-1990s.
Jagannath Mishra, another former Bihar chief minister, was sentenced to four years in jail for his involvement in the scam, said B.M.P. Singh, a prosecution lawyer.
Singh read out the names of 44 other bureaucrats and politicians who were also convicted of embezzling more than $150 million in state funds that were meant to buy fodder for cattle belonging to impoverished farmers in the state.
The verdict comes as India's Congress party-led government has been facing public anger over allegations of corruption, including a poorly run sale of cellphone rights and an alleged misallocation of coal fields that auditors said lost the country billions of dollars.
The decision by the special court in the neighboring state of Jharkhand, once part of Bihar, makes Yadav one of the country's first politicians to face political disqualification under a new Supreme Court order banning convicts from public office.
Yadav, 65, has denied the allegations and his family members have said he will appeal the verdict.
"This is all politics. We will seek justice from the high court," Yadav's wife, Rabri Devi, said Thursday.
The charismatic Yadav is credited with changing the shape of Indian politics, previously dominated by the elite classes, by galvanizing low-caste Hindus into a powerful voting bloc.
He served as Bihar's highest elected official from 1990 to 1997, when he was forced to resign amid allegations that he was pocketing funds meant for farmers in the desperately poor state. He spent five months in jail that year, while his wife took over as chief minister.
Yadav later served as the federal railway minister in 2004-09. He and his wife were acquitted in a separate case that accused them of accumulating wealth and property beyond their legal incomes.
Yadav founded the Rashtriya Janata Dal party in Bihar and has been a staunch ally of Prime Minister Manmohan Singh's coalition government.
Yadav's conviction came a day after the government withdrew a controversial executive order exempting legislators from the Supreme Court ban on convicts holding political office.