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If M is turing Machine Then what is L(M) denoting here??

1) is it denoting Language generated by turing machine

or

2) encoding of turing machine(in 0's and 1's) as a language?

$L(M)$ is used to denote the language that is recognised by the Turing Machine.

For an encoding, the general notation used is $<M>$.

The encoding of a TM, is a string that encompasses all the information of the 7-tuple describing $M$. You can think of it as "writing the 7-tuple as a binary string" (but this is a simplification). So the encoding of $M$, is just a string that describes how the TM works.