The operating system returned error 21(The device is not ready.) to SQL Server during a read at offset xyz in file 'c:\Microsoft SQL\file1.mdf'. Additional messages in the SQL Server error log and system event log may provide more detail. This is a severe system-level error condition that threatens database integrity and must be corrected immediately. Complete a full database consistency check (DBCC CHECKDB). This error can be caused by many factors; for more information can any one explain me above error and remedy.
It sounds like you have an issue with the part of the disk that has the c:Microsoft SQLfile1.mdf file. You need to preserve the latest backup of that database (copy it somewhere safe) as it may be needed to restore the database if other actions dont recover it as needed. Read up about DBCC in books online and then choose the option that you are happy to accept - some methods of running it will simply lose data where the sectors are bad.
Adding to Fatherjack's answer - as you state it is drive C: I am guessing this is the OS installation drive too. Make sure you back up the entire system (you are doing this anyway though, right?). You will need to check that your RAID controller and hard drive(s) are OK. This could be a problem at the really low level - disk head crash or similar, that is only now becoming apparent. The sooner you check and fix this problem the better!