I have saved it in my working directory (not in cgi-bin) and tried to open it in the browser. What is surprising me is that the browser shows the code rather than the image which it was suppose to generate.

Your web server needs to be configured to know which URLs are CGI programs. CGI programs are usually identified by location (i.e. all files in /cgi-bin) or by name (i.e. all files with a .cgi extension). Sounds like your web server isn't configured to recognise .cgi files as CGI programs.