kprasanna_79,
This is one of those questions where it really would take far too long to explain not knowing how much background you already have. In a nutshell, a signal is a way to communicate with a running process. You can tell it to terminate for instance. In most cases, the process can "catch" the signal and handle it appropriately. That's what the code you have found is doing. Read perlipc and then come back with more specific questions if that doesn't answer them.
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