Pulp paper mill effluent has high pollution load due to presence of lignin and its derivatives as major colouring and polluting constituents. In this study, two lignin degrading bacteria IITRL1 and IITRSU7 were isolated and identified as Citrobacter freundii (FJ581026) and Citrobacter sp. (FJ581023), respectively. In degradation study by axenic and mixed culture, mixed bacterial culture was found more effective compared to axenic culture as it decolourized 85 and 62% of synthetic and kraft lignin whereas in axenic conditions, bacterium IITRL1 and IITRSU7 decolourized 61 and 64% synthetic and 49 and 54% kraft lignin, respectively. Further, the mixed bacterial culture also showed the removal of 71, 58% TOC; 78, 53% AOX; 70, 58% COD and 74, 58% lignin from synthetic and kraft lignin, respectively. The ligninolytic enzyme was characterized as manganese peroxidase by SDS-PAGE yielding a single band of 43 KDa. The HPLC analysis of degraded samples showed reduction as well as shifting of peaks compared to control indicating the degradation as well as transformation of compounds. Further, in GC-MS analysis of synthetic and kraft lignin degraded samples, hexadecanoic acid was found as recalcitrant compounds while 2,4,6-trichloro-phenol, 2,3,4,5-tetrachloro-phenol and pentachloro-phenol were detected as new metabolites.