Subhash Nagre, Sarkar (Amitabh Bachchan), is approached by a wealthy businessman, but a middleman in this situation, Gandhi. Gandhi’s intentions were to use Sarkar’s standing amongst people, to clear out a slum for his real estate development.Sarkar suggests Gandhi to offer appropriate compensation and relocate the slum dwellers. Gandhi deems that too expensive and would rather offer a smaller commission to Sarkar to force the relocation. Sarkar refuses and, when Gandhi insists that he will go to another power bastion, Sarkar asserts that he will not let Gandhi go ahead. Gandhi reports back to his Dubai based boss Vallya (Jackie Shroff). They join hands with a rival opposition leader named Govind Deshpande (Manoj Bajpai) and plot to oust Sarkar.

Sarkar’s wife (Supriya Pathak) pleads with him to permit Shivaji "Chiku" (Amit Sadh) (the grandson) to join him. Sarkar hesitates: the boy is hot-headed and volatile like his father Vishnu, but ultimately lets him come. Chiku immediately clashes with Gokul (Sarkar’s longtime loyal right hand man) (Ronit Roy) over various matters including whether or not to eliminate Deshpande. It is implied that Chiku's girlfriend Anu (Yami Gautam) is using him to get to Sarkar because Sarkar had ordered the elimination of Anu’s father.

Meanwhile Gandhi approaches Gokul with the proposition to help him or Chiku would become the next Sarkar and Gokul will remain a servant. Deshpande plots with Gandhi and Vallya to instigate mill workers against Sarkar. Chiku is on the warpath to attack Deshpande. Sarkar tries to calculate who is behind everything. One day, Deshpande is hotly pursued and killed and Sarkar, who has long held a reputation for bumping off opposition, is blamed. Sarkar notes that whoever did this is determined and cunning and will stop at nothing. When assassins open fire on Sarkar at the Ganpati Visarjan festival, it becomes clear that Sarkar’s inner circle has been breached. Chiku shows Sarkar the video of Gandhi meeting Gokul and, separately, Gokul remonstrates and says that Chiku, used by the wily Anu and his own vengeance for his father, is behind everything. Sarkar expels Chiku whereupon Chiku joins Gandhi.Vallya orders a bomb blast at the mill. Gokul rightly reports that it was executed by Chiku (who is now out to destroy Sarkar) and Gandhi.

Around this time Sarkar’s wife passes away. Gokul beseeches Sarkar to give the order to kill Chiku. Chiku is fired upon but he escapes. Gokul begins hunting him down.Soon, Gokul is shot dead (presumably by Chiku) and Sarkar swears revenge on Chiku. Vallya arrives in India and meets Sarkar. He points out that Chiku is too inexperienced to become Sarkar and is therefore useless, and offers to help Sarkar eliminate Chiku. Sarkar discloses that Chiku was dispatched to infiltrate Gandhi by Sarkar himself. Differences with Anu had been cleared and she too was taken into confidence. Gokul had turned to Gandhi and played a part in the mill agitation and in the slum development so as to sideline Chiku and eventually become Sarkar. The objective of this plan was to draw out Vallya. Chiku walks in at this point. A gunshot is heard marking the death of Vallya and Sarkar starts teaching Chiku a lesson in palace politics.