When I drag a file, it doubles my mouse cursor with icon of the file. Image below shows how it exactly looks like. After dragging completed, the cursor should be normal again but it stays like that. Is there any way I can disable this feature?
This is a bug that affects the Ubuntu lts-utopic hardware enablement stack (which is what elementary OS Freya uses). You can see the bug report here: https://bugs.launchpad.net/ubuntu/+source/unity/+bug/1390625
If you experience the bug, you can reset your cursor by logging out or changing TTYs (Ctrl + Alt + Fn).
As has been said, this does seem to occur with other Ubuntu versions as well.
Initially I was logging out then used Windows key+L to lock the screen then log back in. This way you can keep your apps open.
Alternatively you could try the following from Moch Sholichudin (ms-patrik99) on the Elementary Os Bug list ref 1430587:
Fixing this problem is rather too easy. Open a terminal (Ctrl+Alt+T) and use the following command:
$ gsettings set org.gnome.settings-daemon.plugins.cursor active false
Another user Gabriel Couto (gmcouto) said that this didn't work initially but setting it back to 'true' afterwards did.