The present invention relates to a biodegradable, inhalable microparticle formulation comprising a compound of formula I obtained by fermentation of a microorganism of the Streptomyces species (PM0626271/MTCC5447), as described in PCT application publication WO2011027290, and a biodegradable lipid for drug delivery wherein the ratio of drug (compound of formula I) to lipid is 1:15 to 1:25. The present invention also relates to the process for preparation of the formulation and to the method of treatment of pulmonary tuberculosis, multi drug resistant tuberculosis (MDRTB), methicillin resistant Staphylococcus aureus (MRSA) pneumonias and methicillin sensitive Staphylococcus aureus (MSSA) pneumonias by administering therapeutically effective amount of the formulation to a mammal in need thereof. The present invention further relates to a method of delivering the microparticle formulation to a mammal in need thereof, wherein the formulation is administered by inhalation or intratracheal instillation for pulmonary delivery.