The machine runs currently the Elementary OS, I did connect sata m2 externally to this laptop-it recognized, I even formated the sata m2 drive to ext4, but once connectd sata m2 back to laptop slot, sata m2 was not recognised.

Actually I found newer bios file , but it is in .exe format, does that mean I have to update thebios through windows?

Bios file was here: https://www1.medion.de/downloads/index.pl?op=detail&id=18617&type=treiber&lang=uk

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Yes on windows, but be careful with bios updates, it usually come with some initial checks, but it's always a bit of a risk. In my opinion is a 90% bios incompatibility

Dumb suggestion try a different sata cable.

Its a laptop, there are no sata cables.