An efficient one-pot microwave assisted stereoselective synthesis of novel dihydro-2'H-spiro[indene-2,1'-pyrrolo[3,4-c]pyrrole]-tetraone derivatives through three-component 1,3-dipolar cycloaddition of azomethine ylides generated in situ from ninhydrin and sarcosine with a series of 1-aryl-1H-pyrrole-2,5-diones is described. The synthesised compounds were screened for their antimycobacterial and AChE inhibition activities. Compound 4b (IC50 1.30µM) has been found to display twelve fold antimycobacterial activity compared to cycloserine and it is thirty seven times more active than pyrimethamine. Compound 4h displays maximum AchE inhibitory activity with IC50 value of 0.78±0.01µmol/L.