Muthulakshmi was acquitted by Judicial Magistrate Krishnan on the ground that the prosecution was not able to prove charges against her and 10 others.
One of the most wanted criminals for sandalwood smuggling, elephant poaching and killing at least 130 people including police officials, Veerappan was shot dead in a joint operation by the special task forces of Karnataka and Tamil Nadu in 2004,
ending his long elusive run for two decades.
The court, in its verdict on Monday, however held that charges were proved under various sections of IPC including dacoity against 13 persons, including seven women, who were sentenced to one year rigorous imprisonment besides being slapped with a fine of Rs 150 each.
The prosecution case was that on July 30, 2000, Veerappan and his associates kidnapped Rajkumar for ransom from a farm house of the actor at Thottagajanoor in Erode district.
Rajkumar was released after a 108-day ordeal on November 15, 2000 by Veerappan suspectedly after a huge ransom was paid.
Altogether, 26 persons were arrested in connection with the abduction, two of whom died during the trial.