Industrial development and increase in population has generally been equated with ecological degradation that leads to environmental pollution. Every year millions of tones of pollutants are introduced into the environment by various industries. Thousands of small scale and even some bigger industrial units dispose waste, more often toxic and hazardous, in open spaces and nearby water sources. Over the last decade many cases of serious and permanent damage to environment by these industries is reported. An experimental study was conducted to obtain the vermicompost using partially decomposed fruit waste with paper industry sludge’s. The earthworm species used for this process was Eudrillus eugeniae. The microorganism culture Pleurotus was added to enhance the degradation process. Moisture content was maintained by providing proper percentage of water. The partially decomposed organic waste and industrial sludge’s were converted into castings by earthworms. The castings was obtained on the top surface of the bin were in the range from 20 to 30 days depending on the type of waste and sludge used. The castings obtained were sieved, dried, tested and used as manure. Thus the vermicomposting process helps in the disposal of organic waste and industrial waste in a safe, economic and useful manner.