I am trying to run a python file from the telnet session
Steps:
Dailyscript.py

Telnetting in to montavista
from the telnet session I am trying to run another python file "python sample.py"

sample.py

Importing TestLib (in this file)

But, when I run directly form my linux box, it is running fine. 
Is there any thing I need?
Most likely the problem is that TestLib.py isn't in your working directory. Make sure your Dailyscript.py sets its directory to wherever you ran it from (over SSH) before executing python sample.py.
Also, if you have SSH access, why aren't you just using SSH?
Import Error: No Module found named TestLIb