In this paper, a non conservative interpolation boundary condition, for the non-matching mesh blocks, was developed and validated for the micro compressor casing treatment. The conservative variables were interpolated in the halo layers of non-matching mesh interface using Finite Element Method (FEM) type linear interpolation shape functions, instead of using overset grids. Using this new boundary condition, the effect of casing treatment on stall margin and compressor performance is investigated for a mixed flow type micro-compressor. The computed compressor performance map for the casing treatment case is compared with the experimental results and shows good agreement except in the region close to stall. With the application of the casing treatment, improvement in the stall margin is observed without the loss of efficiency over the operating range.