After crawling through scores of pages, found this tutorial, which works like a charm.

http://www.sigerr.org/linux/setup-vsftpd-custom-multiple-directories-users-accounts-ubuntu-step-by-step/

Couple of things overlooked in this:
500 OOPS: priv_sock_get_int
Fix: add to /etc/vsftpd.conf
seccomp_sandbox=NO

passive mode in filezilla
fix: http://sumantjsr.blogspot.in/2011/12/fix-for-sent-passive-reply-with_5945.html

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