The story is about Vishal (Ajay Devgn) who is married to Swati (Urmila Matondkar). The couple buy a high rise apartment at a ridiculously low price. The caretaker of the apartment, Mr Thakkar (Amar Talwar) explains to Vishal that a widow named Manjeet Khosla(Barkha Madan), the previous resident, committed suicide after killing her own son. Vishal hides this fact from Swati, as she will object to buying such a residence. But Mr.Thakkar accidentally slips in the secret.
Swati is livid at Vishal, although he disbelieves the notions of ghosts and bad luck. Then, Swati starts behaving strangely. Vishal consults Dr Rajan (Victor Banerjee). But soon enough, Vishal and Mr Thakkar's son Sanjay (Fardeen Khan) witnesses Swati killing the watchman of the apartment in a supernatural way, and his skepticism is rudely challenged. Sanjay came to visit his father, and has started to suspect Vishal since he saw Swati murder the watchman. He informs Inspector Qureshi(Nana Patekar), who reaches the apartment to investigate the death, however he becomes suspicious of the duo and their strange behaviour.
Finally, Vishal's maid calls an exorcist named Sarita (Rekha). Sarita sees the ghosts of Manjeet and her son. She advises Vishal to meet Manjeet's mother (Tanuja), since she can placate her daughter's spirit. Vishal complies and meets Manjeet's mother. He learns from Manjeet's mother that Manjeet was not the type of woman who would commit suicide. He explains the situation to her and asks her help. She comes with him and somehow placates Manjeet's spirit. Meanwhile, Sanjay, is seen behaving erratically since the watchman has been brutally killed. His father Mr Thakkar calls him to the apartment.
The exorcist sees Sanjay entering the building and confronts him. It is then revealed that many years ago, Sanjay came to visit his father and got his heart on Manjeet as he saw her in the apartment. He broke into her house, and had developed a lust for her, but when she rejected him, he pushed her and she accidentally fell off the balcony and died. But Manjeet's son saw the murder, upon which Sanjay hired the watchman to kill him. Manjeet, who has still occupied Swati's body, sees Sanjay and chases him. Qureshi tries to stop her, having no idea of the real story. Qureshi then catches Sanjay, but is unaware that he had murdered Manjeet, and lets him leave.
Sanjay escapes, only to find himself surrounded by Vishal, Sarita, Manjeet and Qureshi who now knows the truth. A terrified Sanjay confesses the crimes, upon which Manjeet's mother urges her to stop. Sanjay is arrested by Inspector Qureshi, and thrown into jail. Manjeet leaves Swati's body, and Vishal and Swati live a good life in the apartment. Meanwhile, in the lockup, Qureshi tells Sanjay that death sentences are light penalties for a criminal like him. He wishes that Sanjay gets a bigger punishment. After Qureshi leaves the darkened cell, Sanjay finds himself face to face with Manjeet. He starts begging for mercy, but his voice soon fades out.