The chlor-alkali industry at Ganjam producing tons of caustic soda, HCl and liquid chlorine since 1962 and releasing mercury along with cell house washings and other chemicals as effluent up to 2012, which is stored in an open stocking pond nearer to the river Rushikulya for over a period of last 12 years. Earlier the effluent was directly discharged into the river which contaminated the Rushikulya estuary and ultimately Bay of Bengal. The toxic effluent affects the flora and fauna of the area and also affects the cropping system of the surrounding area. Samples were collected from 9 stations and analyzed. Temperature, pH, salinity, total dissolved solids (TDS), conductivity and dissolve oxygen (DO) have been analyzed. TDS value ranged between 22.1-35.4 ppt (summer) and 29.2-41.0 ppt (rain). The value of DO around 10-11 mg/l, was beyond the permissible level. Salinity ranged between 25.5-40.8 ppt (summer) and 30.2-51.6 ppt (rain). Conductivity value was found to be between 33.5-53.3 ?s/cm (summer) and 35.4-60.2 ?s/cm (rain).The effluent and river water was alkaline throughout the year. These parameters were found to be more than standard values. 10 plants collected from surrounding of the stocking pond, belonging to 7 families, showed significant amount of residual mercury level in the plant body absorbed from the environment. Gradual decrease in residual mercury concentration was observed in most of the plants from 2011-2015. Leaching of the effluent from the stocking pond to the river also pollutes the water body and carried the toxic chemicals in to the estuary and route to Bay of Bengal.