Suraj (Navin Nischol) is an industrialist who has had a failed love affair with Sushma (Neelam). He plans to build a new hotel and asks his friend Vijay (Rakesh Roshan) to find a person to help him find a suitable location. Vijay sends estate agent Chhagan Lal Patel (Ranjit) to Suraj. Chhagan Lal is a dishonest person who along with his assistant Shabbo (Prema Narayan), plans to dupe Suraj . They offer money to Suraj's secretary Lalwani (Sudhir) and make him a part of their plans as well. Chhagan Lal and Lalwani get in touch with a priest (Krishnakant) and tell him that they plan to build an orphanage, but are unable to find cheap land for the same. They convince him to sell the church's burial ground for the purpose. The priest's associate Judas (Prem Bedi) helps them in this task. Chhangan Lal and Lawani take the help of advocate Kapoor (Pinchoo Kapoor) in forging the sale documents for the property. A local civil servent Mahendar Prasad Gupta (T. P. Jain) and Chhagan Lal's accomplice Gadhucha (Janki Das) also help them. The priest soon finds out the truth, confronts Chhagan Lal and his gang of crooks. But the priest dies. Suraj decides to send Vijay's younger brother Sanjay (Prem Krishen) to supervise the hotel's construction and decoration work. Sanjay finds out the truth soon after. However, before he could inform Suraj and Vijay, Chhagan Lal and the others murder him and hide his body. The hotel's construction is soon completed and Suraj and Vijay arrive for its opening. The spirits of the people buried in the cemetery used for the hotel's construction begins haunting the place. Many guests come for the opening including Seth Girdhari Lal (Narendra Nath), the old man Sushma was married to. Other guests include Rajendra Nath (as film director Rajandra Nath) and Mehmood (as Nawab Arshad Ali). Gadhucha is killed during the hotel's opening ceremony itself. Even as Vijay romances the village girl Vandana (Bindiya Goswami), Chhagan Lal's accomplices start dying in gruesome ways. While Lalwani is struck by lightening, Seth Girdhari Lal is killed by Chhagan Lal's gang due to a misunderstanding. Chhagan Lal and his accomplices try to flee from the hotel, but are unable to do so due to a landslide that cuts off the area from the rest of the world. Shabbo is unable to bear the torture of the haunting spirits and guides Vijay and Suraj to Sanjay's dead body. Suraj and Vijay get into a fight with Chhagan Lal and the others to revenge Sanjay's death. The ghosts meanwhile kill Shabbo, Gupta, Kapoor, Judas, and Chhagan Lal one by one. Suraj and Vijay convert the hotel into an orphanage as promised to the priest. Vijay and Vandana join hands and Suraj wins back Sushma's love.