Question

if a force is acting on a moving body perpendicular to the direction of motion, then what will be its effect on the speed and direction of the body ?

Answer 1

perpendicular force acting on an object will only change the direction of its velocity, not its magnitude. The explanation that was provided to me is that because there no force in the direction of its velocity, 

Answer 2

both net speed and direction will change or only the direction will change -- depends on the way force acts.

If the force acts  at one instant perpendicular to the velocity of the particle, then the direction of the particle changes.  The speed also changes due to the impulse (force * time duration it acts).  The resultant velocity will be more in magnitude (vector sum of the two perpendicular components).
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If the force acts continuously at right angles to the velocity of the particle, then the particle goes around in a circle.  This is like the planetary motion, Earth moving around the Sun.  This is called uniform circular motion.

  Since the change in velocity is always perpendicular to itself, it contributes to change in the direction only.  The force supplies the centripetal acceleration. The speed and kinetic energy of the particle remain constant.