Abdul Nasser Madhani, the chairman of the Kerala-based People's Democratic Party, was acquitted in five charges including the conspiracy to trigger serial blasts in Coimbatore on Feb 14, 1998.
Justice K Uthirpathy also acquitted the prime accused S A Basha, the Al Umma founder, of four of the six charges.
He was convicted of criminal conspiracy and creating communal tension.
The quantum of punishment will be decided during the week.
The punishment will be pronounced on 6th and 16th of August, 2007.
'Let them not demolish the mosques in Kashi and Mathura'
220 cases had been filed against 181 accused in the case. 166 have been arrested. Three of them got bail last week, there was no evidence against them. The court took nine and a half years to conclude the case. 15 accused are either absconding or dead.
The previous day there was frantic activity at the city police commissioner's office. The Tamil Nadu special battalion, the armed reserve police, the central reserve police force and policemen from every district in Tamil Nadu had been called in to provide security.
Coverage: The Coimbatore serial blasts
Two layered security has been provided for the court and all sensitive points in the city.
There were police patrolling jeeps, bikes, cycles and buses. There were check posts at all important junctions.
As the verdict has gone against the accused, the police are expecting Muslim fundamentalists to set of bombs to announce their protest. As a precautionary measure all vehicle movement to the neighbouring state Kerala have been halted.
After reading out the charges against Basha the judge called Ansari who is the secretary of the Al Umma. Ansari has 15 cases against him.
The outline of what the judgment will be known later in the day.
Out of 166 only about 20 accused had been brought to the court on Wednesday.
Top: Defence counsel B. Mohan; Bottom: Prosecutor T A Selvaraj
With PTI inputs | Photographs: A Ganesh Nadar