2004
A gang of heavily armed men scour and finally narrow down on a house in Wasseypur. They surround the house and unleash a wave of bullets and grenades on it with the intention of killing the family inside it. After heavy firing on the house, they retreat away from the crime scene in a vehicle, convinced they have killed everyone within. The leader of the gang then calls one JP Singh (Satya Anand) on his cell phone and reports that the family have been successfully executed but he is double crossed by JP Singh as a fire fight erupts between them and a police check post blocking their escape route. The scene cuts abruptly for a prologue by the narrator, Nasir.
Introduction of Wasseypur and Dhanbad
Nasir's narration describes the history and nature of Wasseypur. During the British Raj, Wasseypur and Dhanbad were located in the Bengal region. After India gained its independence in 1947, they were carved out of Bengal and redistricted into the state of Bihar in 1956. In 2000, Wasseypur and Dhanbad were redistricted for a second time into the newly formed state of Jharkhand where they remain. The village has been historically ruled by the Qureshi Muslims, a sub-caste of animal butchers who are feared by the non-Qureshi Muslims living there and Dhanbad by extension.
During British colonial rule, the British had seized the farm lands of Dhanbad for coal which began the business of coal mining in Dhanbad. The region was a hotbed of the local faceless dacoit Sultana Qureshi who robbed British trains in the night and thus holds some patriotic value for the locals.
Circa 1940s
Shahid Khan (Jaideep Ahlawat), a Pathan, takes advantage of the mysteriousness of the faceless dacoit Sultana, a Qureshi, by impersonating his identity to rob British ferry trains. The Qureshi clans eventually find out and order the banishment of Shahid Khan and his family from Wasseypur. They settle down in Dhanbad where Shahid begins work as a labourer in a coal mine. He is unable to be at his wife's side who dies during childbirth. The enraged Shahid kills the coal-mines muscleman who had denied him leave on that day. In 1947, Independent India begins to assert its authority over itself. The British coal mines are sold to Indian industrialists and Ramadhir Singh (Tigmanshu Dhulia) receives a few coal-mines in the Dhanbad region. He hires Shahid as the new muscle-man of the coal mine who terrorises the local population to seize their lands and extract compliance.
On a rainy day, Ramadhir Singh overhears Shahid's ambitions of taking over the coal mines from him. Singh tricks Shahid to travel to Varanasi for business but instead, he is murdered by an assassin named yadav. Nasir, Shahid's assistant, finds Ramadhir's umbrella with his initials near the door, concluding that Ramadhir eavesdropped on their conversation. He flees from the place with Shahid's son Sardar in the nick of time as Ehsaan Qureshi (Vipin Sharma), another associate of Ramaadhir Singh shows up too late for killing them. An unsuccessful Ehsaan lies to Singh that Shahid's family has been murdered and buried. Under the care of Nasir, Sardar grows along with his cousin Asghar (Jameel Khan), and learns the truth about his fathers death upon which he shaves his head vowing not to grow it until he has avenged his fathers death.
Circa 1950–60
Ramadhir Singh establishes himself in coal mining by misusing his position and power as a trade union leader by turning it into a mafia organisation threatening laborers into giving a substantial portion of their income to Ramadhir's henchmen.
Circa Early and Mid 1970s
The coal mines are nationalised. A mature Sardar Khan (Manoj Bajpai) and his kins start hijacking Ramaadhir's coal trucks mid transit but Ramadhir Singh suspects the foul play on SP Sinha, a Coal India official and murders him. Post Sinha's murder, Ramaadhir starts being feared by everyone in Dhanbad.
Sardar marries Nagma Khatoon (Richa Chadda). The pregnant Khatoon confronts Sardar Khan and a prostitute inside a brothel and chases him away. Later, Nagma gives birth to Danish but gets pregnant immediately afterwards. Unable to have sex with a pregnant Nagma, Sardar confesses his sexual frustrations with his kins. At dinner, Nagma gives her consent to Sardar to sleep with other women but with the condition that he won't bring them home or dishonour the family name.
Sardar, Asghar and Nasir (Piyush Mishra)start working for JP Singh. They misuse their employment by secretly selling the company petrol in the black market. Later, they rob a petrol pump and a train bogey belonging to the Singh family. They usurp Singh's land leading which forces the two families to confront each other for talks. The meeting ends in a scuffle with Ramaadhir Singh realising that Sardar Khan is in fact the son of Shahid khan who he had murdered in the late 40s. Sardar and Asghar are sent for jail time for hitting JP Singh.
Circa Early 1980s
Sardar and Asghar escape from the jail. While hiding in Wasseyur, Sardar marries a Bengali Hindu girl named Durga (Reema Sen). Asghar informs Nagma that Sardar has taken a second wife leaving Nagma helpless at the situation. Meanwhile, Wasseypur has merged with Dhanbad where the Qureshi goons terrorise the non-Qureshi Muslims. The locals approach Sardar Khan for help. During Muharram, both Shias and Sunnis are out mourning including the Qureshi clan. Sardar uses the opportunity to launch a major bomb attack on many Qureshi shops and houses. The word spreads about Sardar's raids and the people start fearing Sardar more than the Qureshis.
Eventually, Sardar returns home to Nagma and she gets pregnant again. Sardar tries to initiate sex with a pregnant Nagma but she refuses which prompts an angry Sardar to leave her. He goes to stay with his second wife, Durga where she gives birth to his son, Definite. Ramaadhir Singh, noticing that Sardar has abandoned his first family, tries to reach out through Danish by giving him money. An enraged Nagma beats Danish for taking the money while she breaks down in front of Nasir. A thirsty Faizal wakes up in the middle of the night to find Nagma and Nasir about to have sex. Angry, he storms out of the house and becomes a stoner, permanently seen with his chillum. Nasir reveals that the desires were never consummated. Faizal and Nasir never see eye to eye again.
Circa Mid and Late 1980s
Sensing Sardar's increasing clout, Ramaadhir calls his old associate Ehsaan Qureshi who brokers a meeting between Sultan Qureshi and Ramaadhir Singh where the two decide to become allies against their common enemy, Sardar Khan. Sultan asks Ramaadhir for modern automatic weapons which the latter promises to give.
Circa 1990s
Sardar becomes the most feared man in Wasseypur and shifts his business to stealing iron ore. Danish Khan joins in the family business. A failed attack from Sultan Qureshi leaves Danish with a minor injury and causes reconciliation between Sardar and Nagma. Sardar finds Ramaadhir and warns him of terrible consequences if anything ever happens to his family.
A mature Faizal (Nawazuddin Siddiqui) is seriously affected by Bollywood movies as he starts behaving, talking and dressing like Bollywood characters. Faizal is caught by the police for buying guns and jailed. Upon release, he kills the gun-seller (Yadav who unbeknownst to Faizal was the nameless assassin who had killed Shahid Khan (Faizal's grandfather)) who had implicated him to police earlier. Meanwhile, Sardar seizes a lake belonging to a local temple and charges commission on fish sellers who make a catch in that lake. An uneasy peace is maintained between the Qureshi and Khan families when Danish Khan marries Shama Parveen, the sister of Sultan Qureshi.
Faizal reveals to a friend that his father Sardar would be travelling without security the next day. Late night, while Faizal is still asleep, his friend - who turns out to be a spy - calls up the Qureshis and passes this bit of information to them. Sardar leaves home alone and reaches the Durga household to give them their expense allowance. Durga turns out to be yet another Qureshi spy. The Qureshi men follow Sardar's car, and when the latter stops at a petrol pump to refuel they start shooting while Sardar ducks in the car for cover. The Qureshi men put several close rounds through the car window ensuring a precise & unmistakable hit, after which they escape. A shocked Sardar opens the car door and stands up to reveal multiple bullet wounds, one directly on his head. He steps out with his gun drawn trying to locate the shooters but he eventually collapses to his death on a ferry cycle.