TYPO3 Core

You can solve this by going to the install-tool (yourdomain.com/typo3/install).
Go to the section "All Configuration" and search for "disable_exec_function".
Click it and save.

Is your error gone with that?

Rahul, the same like #0010421:
Please try to use mailinglists for troubleshooting!

This is a *bug*tracker, no FAQ, no forum, no mailinglist. It is intended to be used for bugs only!

If you cannot clearly point out that there's a bug in TYPO3, I'm going to close this issue on Feb. 18 evening.

It seems that your hosting does not allow exec function calls. However, these are needed for ImageMagick usage.

Either ask your hoster to enable exec function calls
or
use gdlib only.

Last alternative would require you to set following:
$TYPO3_CONF_VARS['BE']['disable_exec_function'] = 1;
$TYPO3_CONF_VARS['GFX']['im'] = 0;