‘Horror Story’ is about seven youngsters who decide to spend a night in an abandoned haunted hotel. What they mistook as merely rumors, dawns on them to be the truth as they realize they are not alone inside.
The film opens with Vikrant Nerula (Bikramjeet Kanwarpal) entering the deserted hotel Grandiose all by himself. He proceeds to room 3046, then goes to the terrace and jumps off, killing himself.
Seven friends, Samrat (Hasan Zaidi), Magesh (Ravish Desai), Achint (Nishant Malkani), Neel (Karan Kundra), Neena (Radhika Menon), Sonia (Nandini Vaid)and Maggie(Aparna Bajpai), reunite in a local pub after several years apart to celebrate the farewell of one of their friends, who is going abroad for higher studies. They learn about an abandoned hotel that is reportedly haunted. It had originally been a mental asylum for the criminally insane but was almost completely destroyed in a fire, the origin of which has never been fully explained. After years of neglect, the ruins were refurbished into a five star hotel by a builder who is Vikrant Nerula. The hotel was unsuccessful due to the strange happenings and drove the owner to suicide, though rumors state that he was pushed by the ghost of an asylum inmate. Intrigued, the group decides to explore the abandoned building.
They enter the hotel and Neena observes strange things but Neel brushes her claims aside. They find a TV set on with no transmission or power and both Achint and Neel hear the sounds WELCOME. Ignoring it as mental concoction, they proceed to room 3046, a notorious suite room and there, Sam is killed first. The group flees in panic and shock and come to realize that they are trapped inside the hotel with no way out. Magesh is killed by ghost spirits and the group start being terrorized by a ghostly woman. Sonia is dragged into the darkness by the ghost. With three people dead, the remaining four decide that they must stay together because the ghost attacks them when they are alone. They find an abandoned jeep, which they use to try to get out of the hotel amid ghostly apparitions. After a tiring drive through misty areas, the group reaches someplace new, only to find that they are back at the door of room 3046. They realize that the only way to escape is to survive till dawn.
Soon they are confronted by Sonia, whom Achint and Neel think is the ghost, but a tearful Sonia tells them that it is really her. The group comes to know that when the hotel was a mental asylum, a possessed girl named Maya (Sheetal Singh) was admitted after she murdered her entire family. Maya would always claim to have 'married the devil', and would become very violent at the hospital, even killing the doctors. The fire that broke out killed all the inmates. The group realizes it is Maya who is terrorizing them.
Sonia tries to contact Maya to know what she wants. She gets a call from Maya, saying that the spirit wants to kill them all, nothing else. The terrified group then discovers that Sonia is actually dead and Maya is speaking through her. Neena asks the time from Neel, only to be told that it is the same time she had seen on the clock in one of the rooms shortly after entering the hotel. Believing it is some kind of intuition, they decide to go back to the same room to understand Neena's extrasensory perception. They find a book containing paranormal explanations and a way to locate the energy source of dark spirits. With the help of incantations from the book, they have hallucinations about the past when the hotel was a mental asylum and find that the energy source of the dark spirit is in a shock machine. They decide to burn it down to end the horror. Neel and Maggie go to kitchen in search of something flammable and Maggie is killed by Maya. Achint is beheaded by the spirit, leaving only Neel and Neena alive.
Neel tries to burn the machine but is pulled by the spirit into the closet. Then the spirit starts terrorizing Neena. Neena creates a flame and decides to finish the task, and amidst ghostly apparitions and obstructions, and with the help of the spirit of the man who had died in the beginning of the film, she manages to burn the machine down, resulting in the destruction of Maya's spirit. The film ends with the entrance doors of the hotel opening at dawn, and a traumatized Neena, being the only survivor, walking outside.
The film is heavily inspired from flicks like The Exorcist along with the climax turning into a bhoot-fair of sorts!