How to set a transaction timeout in txpool properly?

Just to elaborate on Mahesh's answer.

Transactions can't be cancelled or marked as failed. Once you submit a transaction to the network there is no way to cancel it.

The only thing you can do it overwrite the transaction. Note that this is just a trick and in reality it just means that you send another transaction to the network with the same nonce. If the new transaction has higher gas price miners will probably include that in a block first. Once that transaction is mined the older transaction becomes invalid as a transaction with that nonce has already been mined.

You can drop/reject transactions using Ethereal with an automated python script that encounters on every 5 seconds.

To understand more about Ethereal, Go through below link :

Releasing Stuck Ethereum Transactions

Hope this answer will help You.