Sorry for the late reply, i forgot i posted here.
The thing is, i installed a bandwidth monitor to keep track of how much I was downloading, and yes, I did exceed the limit (1.5GB only...) but not by the amount MTNL says on my bill.
I was charged over Rs.1000 extra (according to the software's usage data). I contacted MTNL and they said that it was probably because I forgot to switch off and on the modem at 12:00. This is a convenient excuse they have been using for the last few years and I don't know what to do...
If they had some sort of indicator that the 'free download' time has started, then I can avoid this, but MTNL won't bother....
as for my 2mbps speed, it seems to be going at 200KBps as it is supposed to so that's fine.
Also, whenever my phone rings, my internet gets disconnected... I have that splitter box and I have no idea why its doing this....
If anyone has any solution to this 'night-time switching on-off' problem, please do say so.