@ Michael :

I have checked the voltage levels using a scope and will post them tomorrow. I will also check my cable tomorrow. I think what you say is true. the other lines also toggle between voltages as ht communication occurs but i do not remember which ones even though no handshaking protocol is working.

@ Andy :

I cannot find any manual on the link on the RS page but i will check my system according to the thread you have given me. But just ton tell you, i am using my PC with the GSM module and yet not have replaced the PC with the microcontroller. I am checking the voltage levels on the 9 pins so that i can make the circuit on the microcontroller side (with help from U Guys)