Set background image of an openGL window

I am trying to set a background image of my openGL window by creating a quad on an orthogonal projection matrix and adding texture to it. I am also making use of GLUT toolkit in my application.

However I am having several problems. Below are screenshot illustrating the problem: image is grayscale and it repeats on x and y, even though texture size is set to be the same as the quad.

That is what I am trying to achieve:

And that is what I am getting:

Code for rendering and loading texture looks like this:

void orthogonalStart (void) {
    glMatrixMode(GL_PROJECTION);
    glPushMatrix();
    glLoadIdentity();
    gluOrtho2D(0, w1, 0, h1);
    glScalef(1, -1, 1);
    glTranslatef(0, -h1, 0);
    glMatrixMode(GL_MODELVIEW);
}

void orthogonalEnd (void) {
    glMatrixMode(GL_PROJECTION);
    glPopMatrix();
    glMatrixMode(GL_MODELVIEW);
}

GLuint LoadTexture( const char * filename, int width, int height )
{
    GLuint texture;
    unsigned char * data;
    FILE * file;

    //The following code will read in our RAW file
    file = fopen( filename, "rb" );
    if ( file == NULL ) return 0;
    data = (unsigned char *)malloc( width * height * 3 );
    fread( data, width * height * 3, 1, file );
    fclose( file );

    glGenTextures( 1, &texture ); 
    glBindTexture( GL_TEXTURE_2D, texture ); 
    glTexEnvf( GL_TEXTURE_ENV, GL_TEXTURE_ENV_MODE, GL_MODULATE ); 


    //even better quality, but this will do for now.
    glTexParameterf( GL_TEXTURE_2D, GL_TEXTURE_MIN_FILTER,GL_LINEAR );
    glTexParameterf( GL_TEXTURE_2D, GL_TEXTURE_MAG_FILTER,GL_LINEAR );


    //to the edge of our shape. 
    glTexParameterf( GL_TEXTURE_2D, GL_TEXTURE_WRAP_S, GL_REPEAT );
    glTexParameterf( GL_TEXTURE_2D, GL_TEXTURE_WRAP_T, GL_REPEAT );

    //Generate the texture
    glTexImage2D(GL_TEXTURE_2D, 0, GL_RGB,