Seth Sohrabji Bandookwala, an eccentric millionaire, wants to divide his considerable wealth before dying. He strikes up the idea that he wants to leave 10 lakh rupees to the person who has the longest black beard. He also wants to leave his secretary Julie 2 lakhs, but on the condition that she has to marry whoever wins the beard competition. Meanwhile, Khadak Singh gets out of jail after serving a fourteen year sentence. His beard has grown to a considerable length during this time. His friend Hercu convinces him that his beard is of sufficient length to win the Seth’s competition – he only needs to dye it black. But their scheme is overheard by another bearded gentleman Rosario.
Khadak Singh arrives at the Seth’s house and his beard immediately outclasses most of the other hopefuls. But Rosario also arrives with a beard equally long. The Seth declares that they have 25 days – whoever’s beard is the longest after that will win. Julie gets fed up with all the bearded men and goes off on a vacation with her friends. Khadak Singh and Hercu plot to eliminate all the other competitors by cutting off their beards. Rosario also falls prey to their skulduggery. But since he is aware of their plans, he is able to blackmail Khadak Singh into promising him a share of the wealth.
While on vacation Julie and her friends stumble upon a man whose beard puts Khadak Singh’s to shame. But when approached the man runs away from them. They later discover that this man is called Gypsy. Gypsy has walked away from his home to open his own theatre troupe and has no desire for the Seth’s money or to marry anyone. Gypsy’s nephew Fakkad arrives and joins his troupe. Julie and her friends continuously try to convince Gypsy to enter the competition but he refuses each time. Fakkad also tries to force his hand by staging a rebellion within the theatre troupe. Poor Gypsy, pressured by everybody, starts having nightmares about having his beard cut off.
Gypsy’s nightmare is not far from reality as Khadak Singh has found about him and arrives looking to eliminate his beard. After some failed attempts, Khadak kidnaps Julie to make Gypsy come to him. The film reaches its climax in a Mexican standoff with scissors between Khadak and Gypsy. Gypsy is able to fend him off and Khadak is packed off to jail again.
The Seth declares Gypsy to be the winner of the competition and also the future husband of Julie. But just at that moment a man named Gulfam arrives with a serpentine beard that is long enough to trail on the floor. The Seth takes back the reward from Gypsy and gives it to Gulfam. Julie also chooses to go with Gulfam for the sake of her two lakhs. A bemused Gypsy blames the director of the film for betraying him at the last moment.