In this paper a lexicon driven segmentationrecognition scheme for unconstrained Bangla handwritten word recognition is proposed for Indian postal automation. In the proposed method, at first, binarization of the input document is done and slant correction of the individual words is performed. Next, using water reservoir concept words are pre-segmented into possible primitive components (characters or its parts). In order to merge these primitive components into characters and to find optimum character segmentation, dynamic programming (DP) is applied using total likelihood of characters as the objective function. To compute the likelihood of a character, modified quadratic discriminant function (MQDF) is used for the purpose. The features used in the MQDF are mainly based on the directional features of the contour points of the components. We tested our system on Bangla city-name images and at present an overall accuracy of 87.21% is obtained from the proposed system.