At a time when his side is stuttering from one defeat to another at the hands of their hostile hosts Down Under, Monty beat a strong field to win the award.
Ailing Castro finished second, while Archbishop of Canterbury Rowan Williams and veteran trade union leader Paul Mackney were tied for the third place after a vote by the members of Beard Liberation Front (BLF), an informal network of beard wearers.
Other nominees for this year's award included author Bill Bryson, broadcaster Bill Frindall, politician George Galloway, journalist Christopher Howse, broadcaster Brian Perkins, author Terry Pratchett, broadcaster Tom Robinson, Stilton cheesemaker Richard Rowlett, actor Ricky Tomlinson, Jimmy Wales of Wikipedia and musician Robert Wyatt.
Amused with the award, an elated monty, in his exclusive diary for a cricket website, wrote, ''I picked up one bizarre award this week - apparently, I'm Beard of the Year 2006, which I found out about a couple of days ago.
I guess I wasn't too much aware of it, but it's nice to get an award for something I've kept since I was 16! ''Fidel Castro, Inzamam-ul-Haq and Bill Frindall were also on the shortlist, so they are strong candidates - there are lots of people with great beards out there.
I guess I've never shaved, so I'm reaping the rewards now,'' quipped Panesar, the first Sikh player to represent England cricket team.
Meanwhile, admitting that the fourth Test was a personal comedown for him, Panesar, however, derived some positive from the match which his side lost badly and it had nothing to do with his bowling.
''I guess there was a bit of a personal high for me in the match.
I got asked to bat at No. 10 for the first time in Tests. I'm working my way up that batting order, but I've just got to keep getting scores and building on the opportunity. Hopefully I'll pick up a few not-outs and a few runs, and keep pushing and pushing further up the order,'' said the tail-ender, who hopes to see himself as the team's nightwatchman some day.
''Matthew Hoggard got bumped down from No. 9 to take my place at 11, but he wasn't at all miffed. He's a great guy to have in the team, a really nice bloke, and he didn't say much to me about it."
"I guess he'll be keeping the nightwatchman role for the time being though. He's done it really well for so many years. But obviously, if the opportunity does arrive - and it'll be up to the coach and the captain - I'll be keen to have a go,'' Panesar said.
''There is a bit of lighthearted banter between the tailenders when it comes to batting. We all have a bit of a laugh and a joke about who's going to get the most runs or face the most balls, and we're always trying to beat each other to the highest score.
But really we're all trying to help each other out in the middle. When we are out there we are batting together as a team and trying to get the total as far as we can,'' he added.