The movie opens with a corrupt and sniveling bank manager Mathur (Prem Chopra) and crime baron JK (Amrish Puri). Mathur is in a financial dilemma as he has illegally loaned JK 50 million rupees, and JK orchestrates a bank robbery to bail him out. Inspector Shrivastav (Kader Khan) gets wind of this plot and is about to crack the case when JK enlists an exotic dancer, Julie (Aruna Irani), to use the robbery as a backdrop and frame the honest inspector for corruption. Inspector Shrivastav, unable to bear the false charges, hangs himself at home after being released on bail. This creates a lasting and powerful impression on his young son, Vijay (Amitabh Bachchan). Vijay retains the noose his father used to hang himself.
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Years later, Vijay (Amitabh Bachchan) grows up in the care of Inspector Aslam Khan (Pran), and becomes a cop himself. Aslam Khan is an honest cop much like Vijay’s father. Vijay is an obsequious and cowardly inspector, prone to bribery and generally scared of powerful criminals. It doesn’t take JK long to find Vijay, get him on payroll, and run his underworld crime empire (drugs, guns, racketeering) past the cops.
A new apparition bursts upon this scene who calls himself “Shahenshah”, a costumed crime fighter (see movie poster). He has a left iron hand which is used to attack enemies and smash objects, and Shahenshah’s other weapon is a noose. Shahenshah describes himself as “one who doesn’t hold a cop’s job but does the same work; one who apprehends criminals himself, conducts the trials himself, and, pronounces and executes the sentences himself”. It is revealed a bit later that Shahenshah is actually Vijay. Frustrated and helpless at the corruption in the police force, Vijay has employed this new tack to get to the criminals. Vijay/Shahenshah’s outward mission is to take out crime, but his real goal is to get to the guys who framed his father.
Shahenshah quietly breaks up several of JK’s gambling dens and illicit liquor distilleries. He also halts the demolition of a slum. This catches the eye of small-time trickster Shalu (Meenakshi Seshadri) who lives there with her aging and ailing mother Julie. JK had ordered her assassination after she helped frame Vijay’s father; she has been on the run from him ever since; this becomes Shalu’s motivation for seeking out and eliminating JK. Shalu decides to infiltrate JK’s coterie by becoming an exotic dancer.
The fun begins when JK murders an honest news reporter Salim (Vijayendra Ghatge) who was about to expose JK’s crime ring. Salim was married to Shaheena (Supriya Pathak), the daughter of Aslam Khan. Vijay now decides to turn around his image as a cowardly cop. He openly defies JK. Julie agrees to testify against JK. Shalu provides ancillary evidence. And JK prepares for an all out war against Shahenshah, Vijay, Shalu and the lot of his enemies.
There is a veritable bloodbath on the streets as Inspector Vijay tries to get Julie into the courthouse. And there is a final showdown where Shahenshah reveals his secret identity and becomes the nemesis for all the culprits. The showdown leads Shahenshah chasing J.K. to the roof of the courthouse where J.K. is pleading his case, because his cover is blown. J.K. falls through a hole in the roof and is clinging on for dear life, with the whole court, judge sahab, audience and all looks on in astonishment. Shahenshah throws the noose down to J.K., and he gratefully accepts it. J.K., being the ruthless man that he is, attempts to attack Shahenshah. Shahenshah lets go of the noose, which slips around J.K.’s neck, and before the whole court, J.K. Verma is hanged, avenging Inspector Shrivastav and Salim the reporter, Shaheena’s husband.