"Abdul Mateen Damada alias Farooq was discharged after we filed an application and told the court that he may be discharged," special public prosecutor Ujjwal Nikam told PTI.
Nikam said the investigating officer filed an application in the court, saying that the evidence collected against him during the course of investigation was not sufficient to submit charge sheet against Damada.
"(Damada) is released under section 169 of CrPC in the view of the prayer made by the investigating officer," said special MCOCA Judge Y D Shinde in his order.
Damada was arrested from Goa airport on July 15 and was suspected to be involved by ensuring that funds reached arrested Indian Mujahideen (IM) co-founder Yasin Bhatkal to trigger the explosions.
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Damada had allegedly provided funds for the blasts to Yasin Bhatkal from Dubai, the police had said.
Three powerful blasts had ripped through crowded areas in Mumbai on the evening of July 13, 2011, killing at least 21 people and injuring 141.
The first explosion had rocked Zaveri Bazar, a popular jewellery market, at 6:50 PM. A minute later, another blast shook the busy business area Opera House. The third blast ripped through the crowded Dadar (West) area in Central Mumbai at 7:04 PM.
Those wanted in the case are Riyaz Bhatkal, who is also a top operative of the alleged home grown terror outfit (IM), Dubai-based hawala operator Muzaffar Kolah, Wasim alias Ibrahim, Muzaffar Kola and his nephew Ubaid.