Rana Mahendra Pratap Garewal (Mukesh Khanna) is a wealthy businessman along with his brother Vishwa (Dalip Tahil). They are good friends with Brijnath (Birju) (Paresh Rawal) who is initially very rich but loses all his wealth in a fire in his factory. The Garewal brothers had initially proposed the marriage of Rana's younger sister Madhu (Madhuri Dixit) and Brijnath's younger brother Raja (Sanjay Kapoor) (both are young; their brothers are adults). They break the marriage off. Shocked and saddened at the rejection by his best friends, Birju goes mad and gets electrocuted by accident. Raja then stays in the city outskirts with his brother taking care of him by doing petty jobs.
After many years, Madhu meets Raja and falls in love. After Raja reveals that he is the same childhood Raja, their love deepens. Rana and Vishwa soon find out and are determined to keep Madhu away from Raja. They continually humiliate and insult Raja, beating him up and forcing him to walk on broken glass to prove his love. One day Madhu runs away with Raja. Eventually, Rana pretends to give in and accept Raja into the family. When Raja leaves the city for a few days, Rana invites Birju to stay at the Garewal mansion. While he is there, they have one of their assistants dress up like Birju and break into Madhu's room at night and pretend to attempt to rape her. Madhu duly screams that Birju is trying to rape her. The assistant quickly escapes; the room is only dimly lit before Madhu can see his face. Rana and Vishwa call a mental hospital and force Birju into it as a prisoner in all but name. Raja is now forced to choose between believing Madhu's and Birju's words. He chooses to believe his brother's protestations of innocence and breaks up with Madhu. However, he still deeply loves her, and it is now up to him to dig for the truth and figure out what happened to Madhu on that fateful night.
In the end, Raja gets a hold of the assistant who dressed up as Birju and extract a confession from him. In the process he has an accident and is critically injured. Birju goes to Madhu asking her to save him but she insults him. Rana's wife (Rita Bhaduri) tells the truth to Madhu. Madhu is so shocked to hear that her own brothers set up her rape that she leaves them and is on the verge of going to Raja's house. Rana realises his mistake and begs forgiveness, but Vishwa doesn't accept and starts beating Madhu and Rana. Raja comes and saves everyone. He marries Madhu in front of everybody. In the final scene, Rana and Vishwa come to Raja's house and beg the trio for forgiveness. They forgive the brothers on the condition that they bless the marriage of Raja and Madhu.