Green chemistry involves design, manufacture, use and disposal of chemical products with minimal or no use or generation of hazardous products. With a growing outlook towards environmental sustainability, people are currently looking at conservation and protection of natural resources for the wellbeing and health of present and future generations. The use of biodegradable kitchen waste for the synthesis of silver nanoparticles is a method which adheres to the principles of green chemistry and environmental sustainability. In the present study, aqueous extract of biodegradable peel waste of Lagenaria siceraria has been used for the synthesis of environment friendly silver nanoparticles. The method reduces the cost involved, makes use of aqueous medium and non-toxic biodegradable ingredients for the synthesis of silver nanoparticles. Characterization of silver nanoparticles was carried out. Reaction parameters like concentrations of reacting species, ratio of reactants, temperature and reaction time were optimized using UV-Visible Spectrophotometry. The SPR band was found at 420 nm indicating the formation of spherical isotropic small sized silver nanoparticles in the size range of 10 to 50 nm. The characterization of the silver nanoparticles with XRD and TEM revealed the crystalline nature of the particles and their morphology. The silver nanoparticles have been employed in the degradation of water soluble benzidine based anionic diazo dye, Congo red dye, which is employed in textile dyeing. The silver nanoparticles acted as nano catalyst in the dye degradation process. The method can be further scaled up and employed for the treatment of industrial waste waters coming from textile industry.