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Distributed video coding (DVC) suits the light weight encoder and complex decoders, shifting the motion estimation to the decoder, in contrast to the conventional encoding scheme. Mode decision is one of the factor affecting the Rate Distortion (RD) performance due to the varying statistics of the sequence in the DVC. In this paper, we propose to introduce coding modes and the Side Information (SI) refinement modes at the decoder in the pixel domain multi resolution refinement(MRR) Wyner-Ziv scheme. During the decoding process, the mode decision of the current decoding layer of the block is based on the information from the previous decoded layers of the block and the updated SI. We further propose the adaptive weighted reconstruction scheme using the neighbor pixels. RD performance of the proposed scheme is tested with several sequences. The results shows significant performance improvement.