This doesn't seem to be a problem with MTNL.
MTNL doesn't require a POP3 mail client (like MS Outlook 2003) to have it's SMTP server (for outgoing mail) set to it's own address, if you're using a different email provider.
Which means, if you use MTNL, Yahoo, or Gmail, for example, here's how you would configure the servers...
MTNL
Incoming mail: pop.mtnl.net.in
POP3 Port: 110
Outgoing mail: smtp.mtnl.net.in (server requires authentication)
SMTP Port: 25
Incoming / Outgoing server account name should be: yourusername@mtnl.net.in
Also see
http://web1.mtnl.net.in/internetservices/configuremail.html
Doesn't have instructions for MS Outlook 2003, but it's the same settings.
Yahoo (regional)
Incoming mail: pop.mail.yahoo.co.in
POP3 Port: 110
Outgoing mail: smtp.mail.yahoo.co.in
SMTP Port: 25
Gmail (uses SSL encryption)
Incoming mail: pop.gmail.com
POP3 Port: 995
Outgoing mail: smtp.gmail.com (server requires authentication)
SMTP Port: 465
Check if you have entered the correct configuration for your work email
If the settings are correct, check whether you have a software firewall installed.
If your firewall, anti-virus, or spam filter is not configured correctly, it would interfere with sending/receiving email.
Once you've checked all the settings, it's time to test.
Send a test email to yourself from Outlook using both your work and MTNL accounts
Also, after a failed attempt to send email, look for an error number.
Should be something like 0x800CCC** (where ** can be OD,OF,OE, etc...)
We could help you better with the error code to find out where the problem lies.
The MTNL staff are not trained on
Microsoft products, so it isn't a surprise that you don't get any help from them. They are an Internet Service Provider. If you can get on the internet and browse and check you messages through Webmail, then you've got no issues with your connection.
If a particular program like MS Outlook doesn't work well, try using Outlook Express, or Mozilla Thunderbird.
Finally, the terminology used in these error messages (like 'illegal') are quite misleading. You could have a genuine email address of the Prime Minister and still receive such error messages.