Mumtaz (Tabu) is a young village woman whose family is killed in communal riots. She moves to Mumbai with her uncle, the only family member she has left. They are desperately poor and her uncle persuades her to become a bar girl at Chandni Bar. This is merely temporary, he promises, until he gets a job. Mumtaz is shy and loathes the work, but she forces herself to dance and flirt. However, the uncle doesn't keep his promise; he lives on her earnings, drinking them away, and never gets a job. He adds one final, unforgivable crime to the list when he gets drunk and rapes her.
By this time she has caught the eye of a gangster called Potiya Sawant (Atul Kulkarni). When she tells Potiya what her uncle did to her, Potiya decides to "defend her honor." Potiya kills the uncle and marries her. She lives with him for several years and gives birth to a son, Abhay, and daughter, Payal. She wants Abhay and Payal to be educated and stay far away from her world of dancing girls and Potiya's gangsters.
Potiya gets in the bad books of other gangsters, loses his connections, becomes a target for the police, and is killed in a planned "encounter," leaving Mumtaz to return to Chandni Bar.
Years pass and Abhay and Payal are in their teens and attending school. Mumtaz still works at Chandni Bar, not as a dancer, but as a waitress. Then the unexpected happens — Abhay is arrested by the police for extortion and held in a juvenile home for the crime he had not committed. At the home, Abhay is raped by a couple of inmates.
Mumtaz attempts to talk to the police, to no avail. She then meets with some influential people, who agree to help her out for a price, which she must bring to them in less than two days. Mumtaz hustles and sells her body to obtain the money but is still short. Seeing her mother's plight, Payal takes up dancing at Chandni Bar and brings the rest of the money to her troubled mother.
With the money turned over to release Abhay, the family heaves a sigh of relief — until Mumtaz notices that it is not the same Abhay she had known two days earlier. This one is cold, ruthless, and has only purpose in life: vengeance. Abhay takes his revenge and shoots the inmates who raped him. It is implied that Payal is following in her mother's footsteps, and Abhay is set to be another Potiya.