The story revolves around a Pakistani and an Indian Solider stuck in the no mans land. It is a desi take on the survival journey and them becoming friends with each other. In the process, they save a Kashmiri boy stepping on a landmine. Somehow they manage to get back to their respective places preaching about peace and truce. No fights between India and Pakistan.
Misha Senthil Purohit (Yami Gautam) and her son Robin become the victims of a bank robbery getaway during a shopping trip. Liak Mohammed Tungrekar (Nawazuddin Siddiqui) and his friend Harman Khatri (Vinay Pathak) rob a bank and use Misha's car to flee. Robin falls out of the moving vehicle during the struggle, and Misha is shot by Liak. Harman jumps out of the car to protect the money. Both mother and son die from their injuries in the hospital.
Raghav "Raghu" Purohit (Varun Dhawan), shattered from the loss of both his wife and son, immerses himself in seeking revenge on both culprits. Liak is sentenced to 20 years in prison but refuses to reveal the identity of his partner in crime. Raghu learns about Janki "Jhimli" Dagaonkar (Huma Qureshi), a prostitute who is Liak's girlfriend and visits her to inquire about the missing partner. After Liak's sentence, Raghu exiles himself to a reclusive life at a train station he gets off at – Badlapur.
15 years later, a terminally-ill Liak is paroled from prison on compassionate grounds. Unknown to Liak, Raghu has facilitated the release by providing a letter of pardon for Liak to the court, in exchange for being told the partner's name by Zeenat, Liak's mother. Bent on vengeance, Raghu finds Harman, who now runs a well-established restaurant. Liak is kept under watch by police as they believe he will lead them to the unknown partner. Liak contacts Harman, and arranges to take his share of the money. However, Raghu has already interrogated Harman and Harman's wife Kanchan "Koko" Khatri (Radhika Apte). Harman tells Raghu that it was Liak and not him who killed his son and wife. Raghu is not convinced and takes Liak's share of the money, killing both Harman and Koko.
Raghu meets Shobha Thakur (Divya Dutta), the worker instrumental in arranging Liak's parole, pretending to be in love with her to create his alibi. He buries Harman and Kanchan's bodies, and police start investigating Harman. Liak learns from his mother Zeenat that Raghu came to know about Harman and breaks into Raghu's house in search of the money. Raghu beats him senseless, and Liak tells Raghu that it was him, not Harman, who killed Raghu's wife and child, but he did it in a moment of panic, unlike Raghu who, Liak points out, planned his murders with a cool mind and without guilt.
Liak meets Jhimli one last time; she, now a concubine of a local businessman, Shardul Patil (Zakir Hussain), breaks down, knowing Liak is nearing death. The police now have circumstantial evidence that Raghu murdered Harman. Liak walks into the police station and takes Raghu's blame, giving him a second chance to live his life, and also doing one good thing in his own life before dying.
After seven months, Liak succumbs to cancer in jail. Jhimli meets Raghu and tells him that he has a second chance thanks to Liak, and should not waste it. She also asks Raghu, now that his revenge is complete and all the guilty are dead, as to what good it did for him. Raghu is silent as Jhimli drives away, leaving him standing in the rain.