CreateFolder worked though the above problem with CreateFile still persists.
IDictionary<string, object> propertiesfolder = new Dictionary<string, object>();
// below property define name
propertiesfolder.Add(PropertyIds.Name, "ICreated");
// below propert define object type & object types can be folder, document etc.., in our case it is folder
propertiesfolder.Add(PropertyIds.ObjectTypeId, "cmis:folder");
IFolder newFolder = rootFolder.CreateFolder(propertiesfolder);