Found the solution, actually it was my mistake not to specify boundary points

mesh = ToBoundaryMesh["Coordinates" -> {{0, 0}, {200, 0}, {200, 1}, {110, 1}, {200,      2}, {0, 2}, {80, 2}},   "BoundaryElements"    ->{LineElement[{{1, 2}, {2, 3}, {3, 4}, {3, 5}, {5, 6}, {6, 1}, {6, 7}}]}]
mesh2 := ToElementMesh[mesh, MaxCellMeasure -> 0.01]

If I use the above mesh2 for solving the PDE, it gives perfect solution. I didn't know how to use LineElement at first, coz the indexing is a bit wierd and the documentation was not clear. But i guess this method is very simple to use once you get it! Hope this helps someone trying to use NDSolve for boundary value problems.

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