Chhoti Si Baat is a romantic comedy about a painfully shy young man Arun Pradeep (Amol Palekar), who lacks self-confidence and fails to stand up for his convictions, in the process letting all and sundry walk all over him. One fine day he comes across Prabha Narayan (Vidya Sinha) at the bus stop en route to work and it's love at first sight... for Arun that is. Lacking enough courage and unsure if his feelings are reciprocated, he pines for her from afar and follows her around, at a safe distance (or so he thinks). Prabha, fully aware of his affections, secretly relishes his discomfort, while waiting for him to make the first move.
While Arun is hopelessly stuck, in comes the suave, brash Nagesh Shastri (Asrani), a colleague of Prabha's, and emerges a serious rival for her attention. It doesn't help that he appears to be miles ahead of Arun in the "race" and is all that Arun is not: He's gregarious while Arun is shy, he's confident and boastful, while Arun is besieged with self-doubt, he's smooth, while Arun is awkward, he's street smart, while Arun's naïve, he's assertive while Arun is timid. Plus he owns a scooter and ensures that he has opportunities to offer Prabha a ride, while Arun can only look on. A gullible Arun, trying to match Nagesh with a motorbike of his own, is conned into buying a dud, further embarrassing him in front of Prabha. He seeks salvation in astrology, tarot cards, dubious godmen only to land with egg on his face.
In desperation, he finally turns to Colonel Julius Nagendranath Wilfred Singh (Ashok Kumar) of Khandala, who has made it his mission to assist those in love find their true destiny. Colonel Singh agrees to help Arun and thus begins the turnaround as Singh begins to mould Arun into a mature, confident young man through meticulously designed lesson plans, peppered with philosophy and "hands on" training. A "born-again" Arun returns to Bombay with a distinguished swagger, brimming with newly discovered self-esteem, ready to take on the world and win over Prabha.