Goa Children's Court Judge Vandana Tendulkar acquitted Samson D'Souza and Placido Carvalho of all the charges in the high profile case, which had cast a shadow on the coastal resort, a former Portuguese enclave.
Carvalho and Samson were charged with culpable homicide not amounting to murder, sexual abuse and drugging.
As the verdict was pronounced in a jam packed court hall, Scarlett's mother Fiona MacKeown did not hide her deep disappointment.
Talking to reporters outside the court here, Fiona, who flew down to Goa from Davon (UK) to be present in the court for the final verdict, said, "I am shocked. I was not expecting acquittal. I was expecting conviction. I will challenge the order."
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Goa Chief Minister Laxmikant Parsekar termed the judgement as "unfortunate", but said it will not hamper the image of the coastal state. "I have just heard about the verdict, I have not gone through the entire judgement. I feel the outcome of the verdict is heartbreaking, it is very unfortunate. Unless, I go through the judgement I would not be in a position to detail my reaction," he said.
The 15-year-old's bruised and semi-nude body was found at Anjuna beach on February 19, 2008. After the body was found, Fiona stayed in Anjuna for a couple of weeks trying to piece together the evidence in the case.
Goa Police was accused of trying to hush up the case. The police had initially dismissed it as a case of drowning, but later registered it as culpable homicide, after Fiona pressed for a second autopsy, which found that the girl was drugged and raped.
The investigating agency had charged Samson of
sexually abusing the girl and leaving her to die on Anjuna coast, while Placido was accused of providing narcotics to her on the fateful day.
Talking to reporters after the verdict, Samson said, "I am relieved. Justice has finally prevailed."
The prosecution had examined 31 witnesses, including the mother of the deceased during the trial.
Interacting with mediapersons in the office of her lawyer, Vikram Varma here, Fiona said medical evidence confirms that her daughter was grievously assaulted, raped and murdered after some criminals gave her alcohol and cocaine.
She said she had high hopes after CBI took over the probe.
"But it is clear that they are either incompetent or corrupt. I don't believe they are incompetent. And all I can say is that if any international tourists come to Goa and get murdered they have no hope for justice in this system," she said adding criminal justice system protects the criminals and not the tourists.
At the time of incident, Fiona and her family were on a holiday in India. Fiona and her other children had gone to the neighbouring state of Karnataka, leaving the 15-year-old Scarlett to the care of a Goan family.
The police investigation had revealed that the girl who had arrived on the shack in the midnight, was allegedly offered the drugs and later sexually abused before leaving her to die on the beach. On March 31, 2008 her body was flown to UK and was kept at a morgue till June 16, 2012 when it was finally buried at her home in Davon.
The CBI filed chargesheet on October 21, 2009 before Goa Children's Court. But the trial, which began in 2010, saw change of five judges and three public prosecutors.