The movie begins with a rich businessman Shekhar Gupta (Rishi Kapoor) going in for a stage dance show with his friend where he gets into love at first sight with the actress of the show Damini (Meenakshi sheshadri).When Shekhar the son of wealthy Mr. Gupta goes to a small hill-station town, he is smitten by the beauty and dance of Damini, and falls head over heels in love with her. When he gets to meet her, he decides that he is going to marry her, and no one else. Shekhar brings his dad to meet Damini and her post-master dad, Chandrakant. Mr. Gupta is charmed by the simple beauty and outright honesty of Damini, and they finalize Shekhar's and Damini's marriage, which is celebrated with great pomp and ceremony. Damini re-locates to Shekhar's palatial home, where she finds that she is not as welcome as she had thought she would be, for Shekhar's mom, Sumitra, had wanted her son to marry the daughter of wealthy Mr. Bajaj.
Then one day, Damini witnesses Shekhar's younger brother, Rakesh, molesting the maid-servant, and rushes to inform Shekhar about this. Shekhar rushes over to prevent the sexual assault from taking place, but is too late. Thus Rakesh and three of his friends are able to abscond with the body of the servant, who had fainted. Then the Gupta family conspire to cover-up this shameful incident. But Damini is unable to get this incident out of her mind, and finally decides to inform the police. She does so, and is instantly shunned by the Gupta family, and asked to leave the house. The police arrest Rakesh and three of his friends, and the matter is taken up in court, and Damini is asked to testify.
Damini is portrayed by the Gupta family's lawyer, Indrajit Chhadha, as a mentally unstable person, with everyone from the Gupta family to her very own dad testifying to that effect. Damini is confined in a mental institution for two weeks by a judicial order. Unable to bear the mental torture in the institution, she escapes and runs into a down-and-out alcoholic lawyer by the name of Govind (Sunny Deol), who has the rape case re-opened. Then the maid-servant dies in hospital, and the police write her death off as a suicide, but Govind is able to prove otherwise. As for the final test of Damini's sanity, the only person who can restore her rightful place is Shekhar. But when the Gupta family comes to know of their son's intentions to testify against them, they decide to have him killed as well to save their family's honour. They have him assaulted by henchmen of Mr. Bajaj but Shekhar escapes injured and arrives in court just on the nick of time to give his testimony. Thus his brother and his friends are convicted and Damini is declared the heroine of justice.