Shell script suddenly not working

I've been having a shell script working file with no changes in the last month( which is actually stored in git repo).

But today when i run it is giving these errors:

% sh minify.sh
: not found1: minify.sh:
: not found2: minify.sh:
minify.sh: 3: set: Illegal option -

When I removed the 3rd line again a new bunch of errors. Yesterday some sever problem was there as Mysql crashed twice. Mine is Ubuntu 12.04.4 LTS

Here is the script code:

set -x

tmp1=/tmp/__fdsfdsf11.js
tmp2=/tmp/__fdsfdsf22.js

rm -f $tmp1 $tmp2 /tmp/vars.log /tmp/funcs.log

bankstr=""

files="$bankstr myscript.js options.js user-selections.js background.js common.js client_server_common.js  injected/remove-alert.js"

for i in  $files
do
        cat $i| /home/ragu/railways/jsparser/collectSymbols> $tmp2
        cat $i| php /home/ragu/railways/jsparser/find_patterns.php >> /tmp/funcs.log

if [ ! -f $i ]
then
echo "$i not found! ..."
exit 1
fi
done

for i in $files
do
        cat $i| php /home/raggupta/railways/jsparser/replace.php> $tmp1
        yui-compressor $tmp1 > $i
done
rm $tmp1