Modelling system dynamics in a hyper-eutrophic lake is quite complex especially with a constant influx of detergents and sewage material which continually changes the state variables and interferes with the assessment of the chemical rhythm occurring in polluted conditions as compared to unpolluted systems. In this paper, a carbon and nutrient mass balance model for predicting system dynamics in a complex environment was studied. Studies were conducted at Ranchi lake to understand the altered environmental dynamics in hyper-eutrophic conditions, and its impact on the plankton community. The lake was monitored regularly for five years (2007 - 2011) and the data collected on the carbon flux, nitrates, phosphates and silicates was used to design a mass balance model for evaluating and predicting the system. The model was then used to correlate the chemical rhythm with that of the phytoplankton dynamics and diversity. Nitrates and phosphates were not limiting (mean nitrate and phosphate concentrations were 1.74 and 0.83 mgl⁻¹ respectively). Free carbon dioxide was found to control the system and, interacting with other parameters determined the diversity and dynamics of the plankton community. N/P ratio determined which group of phytoplankton dominated the community, above 5 it favoured the growth of chlorophyceae while below 5 cyanobacteria dominates. TOC/TIC ratio determined the abundance. The overall system was controlled by the availability of free carbon dioxide which served as a limiting factor.