I wanted to know if the engine ecu estimates Torque. How does it know how much torque it needs to give?

 

The ecu senses accelerator position to determine torque demand and adjusts the fuel/air mixture accordingly to deliver the required torque.

 

Does it in any way do the some calculation and arrive at quantitative value 12Nm etc. What it is capable of?

 

The engine manufacturer already knows what the engine is capable of, from laboratory tests.

 

The ECU may calculate torque, but it may not broadcast the result so that it can be read by diagnostic tools.

Some large truck engines do calculate and broadcast the torque being delivered.

 

https://auto.howstuffworks.com/under-the-hood/trends-innovations/car-computer.htm
https://www.enginetuner.com/learn-engine-management/