Distillery effluent is posing threat to the different components of the environment, mainly affecting soil and water characteristics as the chemicals leaches to the ground water table. The organic materials are mobile in the ground water and constitute a major off site pollution hazard. Large volumes of effluent are often discharged on small areas of land, which aggravates leaching. The study reveals that the physico-chemical characterisation of PTDE (primary treated distillery effluent) have high load of pollutants but when it is diluted with 50% of water, the value was decreased but not as per under control conditions. When diluted PTDE was passed through the lysimeter, all the values of physico-chemical parameters revealed great reduction, variation and fluctuation in leachate on different days and these values increased day by day but it was lower than the value of PTDE leachate. It indicates that the physicochemical value of diluted PTDE was also high. From these observations it may be concluded that the soil has capacity to absorb / adsorb the pollutants but their continuous application may reduce the absorbing / adsorbing capacity of soil and continuous disposal of industrial effluents on lands leads to percolation of pollutants to the groundwater through seepage and leaching, causing contamination.