Bhool BhulaiyaaBadri (Manoj Joshi) heads a Brahmin family in whose ancestral palace in Rajasthan is believed to be haunted by the ghost of Manjulika, a Bengali classical dancer. Siddharth (Shiney Ahuja) and Avni (Vidya Balan), the son and daughter-in-law of Badri's elder brother, return to their native village from United States and decide to stay in their ancestral palace. This leads to Siddharth's childhood love interest Radha (Ameesha Patel), who is Badri's Daughter, becoming jealous but she immediately recovers. Siddharth is crowned as the king, his right to the throne. The palace where Siddharth and Avni were staying was once occupied by Raja Vibhuti Narayan, who was Siddharth's ancestor. He had fallen in love with Manjulika, a dancer hailing from Bengal. But Manjulika was in love with Shashidhar, another dancer, who resided in a house just behind the palace and often met her secretly. On the night of Durgashtami, when the king gets to know of the affair and their plan to elope, he calls them to perform a dance one last time in the court. In the end, the king beheads Shashidhar and imprisons Manjulika in her room. Then on the day of the king's marriage, Manjulika hangs herself and swore that her spirit would not leave any king who lived in that very palace. Various omens started taking place after that, presuming that the "evil eye" may have befallen on the king. The king too dies under unknown circumstances. Soon, with the aid of powerful sorcerers, both Vibhuti's and Manjulika's spirits were locked up in a room in the third floor of the palace using a sacred talisman.
