pears   are fruits
apple   is  fruit
carrot  is  veg
celery  is  vegetable
oranges are fruits

fruits apple   mycode is #q123c# for apple
fruits pears   my code is #q432c# for juicy
veg    celery  my code value is #q989c# for vegetables
veg    spinach code is #q783c# and is a type of vegetable
fruits papaya  i have code #q346c#
vegie  lettuce code #q445c# is vege

Q432C pears fruits
Q123C apple fruit
Q---C carrot veg
Q989C celery vegetable
Q---C oranges fruits

awk 'NR==FNR { a[$1]=1; next } ($2 in a) {print $0} ' File1 File2 | sed -e 's/.*#(.*)#.*/1/' | tr [a-z] [A-Z] > outputFile

awk 'NR == FNR{
         match($0, /#q[0-9]{3}c#/);
         fruits[$2] = substr($0, RSTART+1, RLENGTH-2);
         next
     }
     { print ($1 in fruits? toupper(fruits[$1]) : "Q---C"), $1, $3 }' file2 file1

Q432C pears fruits
Q123C apple fruit
Q---C carrot veg
Q989C celery vegetable
Q---C oranges fruits