C. Pavithran Nair (Mohanlal), also called CP is a young contractor who strives hard to make a living between his family and employees. He has not been very successful so far. However his brother Radhakrishnan Nair (Karamana Janardanan Nair) is a successful contractor who has big contract works at hand, most of which he gained through unlawful ways. CP's brother-in-law (Soman) is also a successful person working in the Municipality.

One day, a bridge constructed by CP's brother Radhakrishnan Nair is collapsed while a bus on it and many people gets killed. It is revealed it is because Radhakrishnan Nair's greed that the bridge was built weak and therefore collapsed. To cover the issue Nair with the help of his brother-in-law Prabhakaran, devise a plan to put the responsibility over their driver's shoulder. The driver who is a poor man because of poor life conditions accepts to take the responsibility for the destruction of the bridge. He is told to say to the police that he blew the bridge up with bomb when his employers', i.e., Radhakrishnan Nair and family refused to raise his wage when he asked them to. Later afraid of the driver revealing the truth, they kill him.

Meanwhile, when the bridge was collapsed a man named Sivan (Sreenivasan) had lost his family (wife and daughter). He comes to these people one day and threatens them for what they did. One day CP happens to meet his ex-girlfriend Radha (Shobana) at the Municipal office who is now an officer in the Municipal office. She is against CP's contract works since CP is trying to mix water-in-milk in his works. She asks him not to seize a road roller which he lost to Municipality as a compensation for damage in a culvert built by him. However he does so and feels great in doing so.

In his conversations with Radha it is revealed that CP was a very active student in his college days and he was in love with Radha. One day in some disagreement on not partaking in a strike organized by CP, Radha is slapped by him and the relationship is broken there until it rekindles later. Coming to the present we see the road-roller which he made his, is not working properly. In order to repair it his friend Gopi (Maniyanpilla Raju) arranges a mechanic named Sulaiman (Kuthiravattom Pappu). Though boasting on his past, Sulaiman does not know the work properly. He keeps on telling CP that he will 'repair it fast' (Ippo sariyakkitharaam) but does not do so.

Finally they arrange an elephant to pull the road roller otherwise as Radha said the Municipality would charge fees for not moving it away from its compound. The elephant which is made to pull the road roller slips the rope and despite the funny efforts of everyone the road roller loses its control and hits the wall of Radha's house. It becomes a big problem and CP tries everything possible to stop it.

Police had been entering CP's house for many reasons which causes his father to lose trust over his son. CP's younger sister Deepa (Lizy) gets marriage proposal from a politician who is not loyal. The proposal is arranged by CP's brother and brother-in-law who have professional interest to be fulfilled from this marriage. CP's sister is later killed from what he believed from hearing that it was a blast of stove but the truth is that Deepa was forced to have sex with the friends of the politicians after which she suicides, thus leading to her death.

The Municipality later decides to stop all contract works of CP. CP thinks that this is Radha's plan and decides to take revenge on her. He cheats her by telling her to pass some money to her brother which he tells he owes to her brother. Just after she receives the money vigilance arrives at the scene and she is arrested. Later she tries to commit suicide but is saved. She is then visited by CP who tells his misfortunate story to her, situations which made him what he is now. The love rekindles between the two then. Sivan who is now a Panchayat President is a righteous person. He does a self-investigation on all illegal activities that pervade in different government offices including CP's brother-in-law's.

CP comes to know about the good heart of Sivan through Radha and he decides to live a truthful life from here onwards. Sivan and CP meet and Sivan trusts CP. Meanwhile, the minister gets a letter requesting to announce an investigation on NREP projects which was misused by CP's brother and brother-in-law. Officers in Village Development Office try hard to make Sivan come to their terms so that they can misuse the fund with Sivan's help. CP is tried as a prop for this, however their plan goes vain. One night Sivan is stabbed by people sent by CP's brother and brother-in-law. CP takes Sivan to hospital.

However, after telling CP his efforts to bring people behind all evil things to the law and after detailing Deepa's ill fate, Sivan dies. CP manages to save Sivan's documents detailing the crimes done by his relatives. He then publishes it and CP's brother and brother-in-law are punished. In the end after justifying his deeds and his earlier failures before his relatives who blame him for sending his own relatives to jail, CP plans to leave his house just as he left while he was young. But he is stopped by Radha who offers all support in rest of his life and in his future ventures.

The film remains a classic in the history of Malayalam Cinema. It is considered as a political satire on the municipal mafia and the ill-fated political system of governments. Just as the story line gets critical attention the comic scenes of the movie also get critical and public attention even years after its release. It criticizes both the crooked bourgeois class as well as lazy employees.

The film has only one song Paaduvaan Ormakalail sung by M. G. Sreekumar and Sujatha, which the music was done by M. G. Radhakrishnan and lyrics by Kaithapram.