Part IV is inappropriate. The sentence describes a sequence of completed events: Mr. X tried to collect the envelope, fell down and lost consciousness. “Was losing consciousness” introduces a continuing action where the intended account calls for the completed event “lost consciousness”.
The participial opening, the position phrase “from under the table”, and “fell down and” fit the intended sentence. The official answer identifies IV; the replacement clarifies the tense and aspect rather than changing who performed the action.