The movie starts with Mandhari, an old crippled man, telling a story of two friends to some kids. In the story, Rajeshwar Singh, a rich landlord's son, and Veer Singh, a poor farmer's son, become friends. They are naughty kids, calling each other as Raju and Veeru respectively. As the duo grow up, Raju decides to get his sister Palikanta's marriage arranged with Veeru. Neither his sister nor Veeru have any objections to the marriage.
However, as luck would have it, a girl's marriage in town is disrupted due to her in-laws demanding dowry. Veeru steps in to save the face of the girl and her parents by marrying her. While Raju is shocked by this development, his sister, who was secretly in love with Veeru, commits suicide. Devastated and distraught, Raju now declares that Veeru is solely responsible for everything that happened, making him his mortal enemy.
With these new developments, the duo has their territories marked. They come to an uneasy and unwritten truce: no one will kill a living soul from the other's territory, but anybody entering the other person's territory will be doing so at their own peril. Chuniya, kin of Raju, sees an opportunity to leech off the money of Rajeshwar by keeping the two sides at war. Chuniya has Veer's son Vishal killed, making the latter believe that Rajeshwar will stop at nothing to eliminate Veer.
Over the years, the tension escalates. The clashes between the former friends becomes a headache for the Commissioner. Mandhari, who is now revealed to be a beggar and part of the story, happens to be one of the lucky few who do not have any fear of death from either side. Mandhari claims to the Commissioner that the day he finds out a solution to the problem, he will dance on one leg.
Here, Rajeshwar's granddaughter Radha and Veer's grandson Vasu meet each other. Radha and Vasu are unaware of the enmity and fall in love. When Mandhari finds out about this, he happily completes his pledge to himself and reveals the truth to the lovers. However, Chuniya decides to stoke the fires once again, which he does by abducting, raping and killing a girl named Amla from Veer's territory. Because Rajeshwar's grandson, Kunal, had secretly married and impregnated Amla, the tensions arise further between the two clans.
Mandhaari reveals his plans to end their grandfathers' enmity, according to which Radha will infiltrate Veer's home, while Vasu will infiltrate Rajeshwar's. The lovers succeed in doing so and try to make the old friends see reason. Aarti, Vishal's widow, learns the true identity of Radha but keeps quiet.
Meanwhile, Chuniya has completely infiltrated Rajeshwar's bastion. He starts making murky deals with shady parties who are interested in acquiring the whole region. Chuniya exposes the lovers as well. Radha and Vasu's pleas fall on deaf ears. However, Chuniya's luck does not last long. The people with whom Chuniya had dealt with attack Rajeshwar, exposing Chuniya's real face. A distraught Rajeshwar and a sympathetic Veer finally sort out their enmity of decades. Here, Chuniya grows desperate and has Radha and Vasu captured, and Radha's uncle Deven killed.
The people from both sides unite to fight against Chuniya; Veeru and Raju's surviving sons, Gagan and Gajja, respectively, are killed in the fight. Soon, Radha and Vasu are saved, but are unaware of the fact that their grandfathers have reconciled. Veeru and Raju kill Chuniya but get fatally wounded themselves. As the friends die in each other's arms, the final chapter on this friendship and enmity is closed.
The story cuts to the present, revealing that Radha and Vasu got married and they formed a trust in the name of their grandparents, which takes care of the education of the children Mandhari is retelling the story to. Radha and Vasu inaugurate the school as Aarti looks on.
