Failed to mount /system, /sdcard, /cache in recovery screen. Keeps vibrating on boot.

My phone model is Micromax Knight 2 E471.
It was working fine but it all happened all of a sudden. I was trying to connect my phone to the computer to access some file. Suddenly, I got a message on my screen that Encryption interrupted with some text and a button to reset. I rebooted the phone but it had the same message and I had no option but to click on the Reset button. From that time until now... it does not want to boot.
Then I searched for it on google and tried to start with two key combinations Power+VolumeUp and Power+VolumeDown. Power+VolumeDown. does not do anything but Power+VolumeUp get me to a recovery screen that says failed to mount /system, /sdcard, /cache and so many things (screenshot attached).

From the recovery option, I tried
1. wipe data/factory reset - doesnt do anything
2. wipe cache partition - doesnt do anything

Then I took it to Micromax service center. They said, OS needs to be reloaded. I paid 250/- and got it reloaded but still the issue was not resolved. Now there is a new problem. When I start the phone, it appears that it is rebooting but there is absolutely nothing on the screen. The screen is completely blank and black. The strange part is that, it keep vibrating after every minute or so which makes me feel that it is caught in a boot loop but nothing is displayed on the screen. The Service center guys says that there could either be a display issue or motherboard issue and in both cases, the hardware cost would be more. But I feel it is a software issue.

I again googled it and got to a page where I downloaded the firmware. The firmware folder had a file "8939_fastboot_all_images" which is a windows batch file. I installed the driver, executed the 8939_fastboot_all_images batchfile and went to the recovery screen I got from Power+VolumeUp key combination. Selected reboot to bootloader. I got lot of things in the ms-dos window but still the problem is unresolved.

I appreciate if someone here could help me what to do next.


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