Sunder Srivastava (Shahrukh Khan) is a young graduate whose main ambition in life is to fulfill his father's dream of starting a school on his half-acre property in his village, though he has no funds to execute his plans. Sunder's childhood friend Prem, a seasoned conman in Mumbai, convinces the gullible Sunder to mortgage. When Sunder comes to Mumbai, Prem has fleed with his money. To make matters worse, he has neither food nor shelter in this new town. Sunder is forced to take shelter in a Christian cemetery. Sunder starts cursing his stars & venting his anger. Somebody responds to him, but Sunder doesn't know who talked. He asks the responder his identity. The responder cannot be seen, but is as surprised as Sunder himself. The responder asks Sunder whether the latter can really hear him.
Sunder realizes that he has been talking with a ghost & panics. The ghost suddenly becomes visible to Sunder & introduces himself as Amar Kumar alias Marco (Naseeruddin Shah). Marco tells Sunder that only he can help Sunder & vice versa. Marco tells his story. Marco was an underworld gangster who fell in love with one Savitri Kaul (Malvika Tiwari), daughter of one Mr. Kaul (Shammi Kapoor). Savitri declined to marry him if he did not leave his ways. To show that he was serious, Marco had planned had resolved to give up crime. This did not bode good with his protégé Kunta(Tinu Anand), who wanted to become as big as Marco himself. On his wedding night, Marco was kidnapped & killed by Kunta, after which he was buried there. Marco tells Sunil that many crimes taking place in the city under his name are actually done by Kunta & his minions.
Marco tells Sunder that due to his sins, he cannot attain redemption. Marco was foretold that only his saviour would be able to see & hear him, so Sunder has to help him. Sunder declines, but Marco surprises him by reminding him of his dream, about which Sunder had not told a thing to Marco. Marco tells him that he wants to see Savitri & Mr. Kaul. He also tells that he cannot touch or harm anybody until time comes. Marco manages to get Sunder a post as games teacher in a school run by Mr. Kaul. Marco is angered to know some time after his murder, Kunta spread the news that Marco had fled the country. Kunta's henchmen tried to rape Savitri, but she committed suicide. Marco is surprised to know that he has a daughter from Savitri called Mala(Urmila Matondkar). What really ticks off Marco is that the school lacks appropriate funding & Kunta is trying to usurp its land. Marco gets more than enough fuel to feed his vengeance.
Mala & Sunder start falling in love. Marco helps this story & keeps Kunta's goons away for some time. Later, Marco shows a secret room to Sunder where he had kept all his loot. The room was not known to Kunta or anybody else, so Marco proposes that an anonymous donation be made, which will be more than enough to save the school & help Sunder. However, due to their oversight, Kunta finds out that room. Marco loses all his money. In a desperate bid, Marco steals some money & bets to double the money. Sunder is held responsible for the theft, although no proof is present. Marco tells the truth to Sunder, on which latter has a fallout with him. Sunder decides to fight, regardless of the pressure. A cricket match between Sunder's team & team headed by Kunta's son is to take place. This is a life & death match.
Marco is sceptical, since he knows that Sunder's team doesn't have a fighting chance. Marco tries to amend things, but Sunder firmly tells that he will win this thing fair & square. However, on seeing the team being trounced very badly, Sunder relents & forces Marco to help them. With help of Marco's spirit, Sunder tilts the sides. Sunder has had a brief meeting with Kunta earlier. Kunta is suspicious that Sunder knows his secret. In a desperate attempt, he abducts Sunder along with Mala & buries them alive in the very place he had buried Marco. Marco succeeds in saving the duo after which he starts overpowering Kunta's goons. Finally, Marco tries to kill Kunta. Kunta is surprised, shocked & unable to understand what is happening. The police arrive on the crime scene & are surprised to see a shocked Kunta hanging midair without any support.
Sunder confronts Kunta, who confesses the truth. On Sunder's cajoling, Marco leaves Kunta alive. Sunder tells the whole story to Mr. Kaul & Mala. In the end, Sunder succeeds in his mission & gets married to Mala. Marco comes in the form of a spirit & blesses the duo, before ascending to heaven. Marco advises that he got a second chance, but whoever is alive must get their act in order, since they may not get one. As he goes, Marco warns the youths that although he came back to life for a second chance to do the right thing, they will not have the same chance; they therefore must make the best of what chances they have.