Hi buy_mohnish,
May be my remarks will help you.
It seems that your player has hacked memory - i.e. physical flash capacity is less than what shown. In Flash MP3/MP4 player, you can store files upto its actual flash capacity, else file system will be corrupted like your cases.
For smooth operation:
Format the player (use FAT as file system for better performance). You can use USB Format utility(search from net). In doing so you may virtually loose its copied/hacked capacity. Dont worried actually you are loosing no space. But then your file system wont be corrupted again.
Regards
skyshopindia