Yes we converted database long time back.
But my issue seems to be fixed as of now, i found some solution as under this location, C:\inetpub\wwwroot\moodle\lib\dml there is a file by name "mysqli_native_moodle_database" and changed the value as shown below from the old one. Its started working.
$result = $conn->query("CREATE DATABASE $dbname DEFAULT CHARACTER SET $charset DEFAULT COLLATE ".$collation)
Thanks a lot for all your help.