The invention relates to a method of isolating Laccase enzyme from a novel strain Arthrography sp. The enzyme is active in the wide pH range from 3-8 However, the pH optimum lies in the range of 3-5 to 6 for various substrates. The enzyme is active in the range of 25 to 80 C, However, the optimum temperature of the enzyme is in the range of 40-50 for various substrates. The isoelectric point of the enzyme is about 3.5 as determined by isoelectric focusing. The molecular weight of the enzyme is about 63 kDa, as determined by SDS-PAGE and gel filtration chromatography. The molecular weight of the enzyme by MALDI-ToF is 58.33 kDa. The enzyme can efficiently degrade various textile dyes including to anthroquinone group, azo group, triarylmethane group, eurhodin group, indigo, triazine and reactive dyes. In the presence of mediators such as hydroxybenzotriole, violuric acid and acetosyringone, the rate of decolorization of dyes is enhanced. The enzyme may also be employed in application in exist in bakery, brewery and wine industry, synthesis of chemicals, fabrication of cathode for fuel cell.