The only diffrence is the while loop and the declaration of spaceOcured. There is no sense that mod2 is not created. Create a new dir and copy the c file and the modt.txt. Try again. It should create the file modt2.txt. Do you heve this error message error:unable to open the filed? If U still have problem comment the while loop and leave only the fopen functions and see the result.

If theres no error mesages than the prog created the file. Put getchar() at the end of the program just to be shore that U did not missed the err message.