(Diacetoxyiodo) benzene has been used as an efficient catalyst for an improved and rapid one-pot synthesis of biscoumarin derivatives in excellent yield under reflux condition using water as an environmentally benign reaction medium. This aqua mediated Knoevenagel condensation of various aromatic and hetero-aromatic aldehydes with 4-hydroxycoumarin using catalytic amount of (diacetoxyiodo) benzene devoid the route of expensive, corrosive reagents and toxic solvents. Along with the routine aldehydes, the aldehydes like aryl-sulphonyloxybenzaldehyde, aryl-carbonyloxybenzaldehyde also leads to the product under the reaction conditions. High yields, shorter reaction times, one pot condensation, operational simplicity, easy work-up, and purification of products by non-chromatographic methods are some additional features of this method.