Is Knn classifier suitable for online learning i.e. Is it effective to apply online learning approach for knn classifier?
KNN is essentially a special (extreme) case of the EM algorithm. Online variants for the EM have been developed (see for instance http://arxiv.org/pdf/0712.4273v3.pdf) and so the short answer to the question is yes
KNN, as any other classifier, can be trained offline and then applied in online settings.
But data generation distribution may change over time, so you'll have to handle so-called "Concept Drifts" (see http://en.wikipedia.org/wiki/Concept_drift). The simplest way to deal with it is to retrain the model over some fixed period of time, e.g. each week. There are good surveys on concept drift adaptation, e.g. by Gama et al, 2014.