"Yes, we have handed her to her family," Director General of Police S P Vaid told PTI.
Sadiya Anwar Shaikh, who turned 18 in November 2017, had travelled to Kashmir from Pune and had been staying in Bijbehara as a paying guest.
The police, who claimed she wanted to join the ISIS, detained her on January 25 from South Kashmir and subjected her to intense questioning during which they found nothing incriminating.
The Jammu and Kashmir police had been informed by central security agencies that a Pune-based woman, who had been detained on various occasions by the Pune Anti-Terrorism Squad, had moved to the Valley and that surveillance needed to be mounted.
Subsequently, an alert was issued to all districts. It named her and claimed that she was a suicide bomber who was planning to disrupt a Republic Day function.
"All are directed to please ensure that frisking of ladies at the (venues) is done meticulously and with utmost caution so as to thwart the designs of ANEs (anti-national elements)," the note, circulated on January 23, read.
Shaikh had been questioned by the ATS Pune in 2015, when it came to its notice that she had been "radicalised" after coming in contact with ISIS supporters abroad.
She was planning to travel to Syria, the ATS had then claimed.
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