Set in Jan 1980, in a police van, ACP Afaaque Baaghran (Anil Kapoor) listens to the story which is narrated by a gangster Manya Surve (John Abraham) who is grievously injured with a bullet-riddled body. Manya Surve is small street gangster who thinks he isn't a "Ch***ya" after a brawl with Dilawar.In 1970 Manohar Surve alias Manya Surve, is a decent student of Kirti College, Dadar. He is equally good in studies and in nature, who had just finished his exams even whilst Vidya is trying to distract him for answers. Vidya asks him why he doesn't give the answers and Manya replies that even though they are in love he will not do anything stupid to stop him being successful. Vidya understands and persuades Manya to take her to meet his parents. Whilst presenting his girlfriend Vidya Joshi (Kangna Ranaut) to his mother to discuss their marriage, Manya is interrupted by his older brother Bhargav Surve. Bhargav is a gangster who is after an underworld don named Nitesh Dhamne (Ranjeet).Soon enough, Bhargav is attacked by Bhaskar's goons, and beaten up. Manya jumps in to save him, while Manya Surve clutches one of the goons. Bhargav stabs the goon, and he dies on the spot. On the day of Manya's exam results, before he can discover his grades, Manye and his brother are arrested by Insp. Ambolkar (Raju Kher) and end up in Yerawada Prison.In prison, another convict named Munir (Tusshar Kapoor) saves Manya from being attacked by a goon named Potya, during lunch time. In this assault, Bhargav is killed. Munir befriends Manya and another convict named Veera, who trains Manya to become stronger. Manya trains and then eventually is challenged by Potya. Manya takes the lead by staying in front of Potya during the whole fight. Soon enough, Potya backfires and beats Manya up, in which response, Manya stabs Potya to his death.in 1978, the Mastan gang rules Mumbai & Afaaque is dealing with the inadequacy of law which does not allow him to tackle the brutality of the Mastan gang members who sexually assault & pillage at will. No one is willing to testify against them, & without proof Afaaque is powerless.Siddque, who is a local newspaper editor, encourages one of Afaaque's officers to use small time crooks Zubair and Dilawar to take out the Manstan gang. In exchange for police protection, a deal is made & Dilawar and Zubair become the undisputed kings of the Mumbai underworld. They help the police in arresting the 2 high ranking gang members of the Mastan gang Yasin & Batla. Later, both Manya and Munir escape from the prison while they were working on a railway track and try to tie hands with two brothers who rule Mumbai's deals. The first brother, Zubair Imtiaz Haksar (Manoj Bajpai) is cool, who is impressed by Manya. However, the second brother, Dilawar (Sonu Sood), disapproves of Manya and dislikes him. Due to this Zubair refuses to form an alliance with Manya & Munir.After this act Manya forms his own gang which consists of him, Munir, Veera and Gyancho, a sharpshooter, brought by Munir. They start with small time bank robberies, but gradually start eliminating local goons to take over the weekly protection money business in select Bombay localities. While trading up, he challenges Bhaskar for the control of Dadar docks & finds out that Bhaskar had sent goons to kill Bhargav when Bhargav had challenged Bhaskar many years earlier. Bhaskar also says that he got Bhargav & Manohar arrested & then killed within jail. Manya kills Bhaskar. Manya meets up with Vidya again and starts a relationship with her. Vidya reveals that Manya Surve had actually received 78% distinction in his exams.Manya's antics get the attention of Afaaque who is concerned with Manya's fast rise & the implications for police force & the city of Mumbai. Yasin & Batla are released on bail & kill Siddique for his role in their arrest. Zubair and Dilawar treat Siddique like their father & avenge his death by killing Yasin & Batla.This prompts a peace meeting between Haksars and Mastans called by Haji Maqsood (a local cleric, kept in high regard by both parties). A peace deal is stuck, but the Mastan's reach out to Manya to kill Zubair. Manya accepts the commission & kills Zubair. Dilawar in retaliation, traps Munir & is about to kill him, but Manya intervenes & saves his life.Dilawar approaches Afaaque for a deal to kill Manya. Afaaque refuses & approaches his senior who advises him to pick one out of Manya and Dilawar to eliminate. Afaaque picks Manya as Manya is a jail escapee, but Dilawar is an innocent man in public. Afaaque sets a trap for Manya when he comes to meet Vidya in Wadala & brutally shoots him down in what is considered to be the first encounter in Mumbai police's history. Manya dies on the way to the hospital while narrating his story to Afaaque.