The film ‘Kankan De Ohle’ deals with agrarian reforms and seeks to promote the idea of cooperative farming. The film depicts a test of will and honesty of a person. Chaudhary Kartara (Uma Dutt) takes on the identity of bandit Kartara (Anwar Hussain) in order to save the marriage of his friend's daughter Rano and is sent to jail. Believing him to be guilty, the villagers throw Chaudhary Kartara’s wife Lajo (Mumtaz Begum) and son Kaka (Master Ratan) out of the village. Lajo is shocked to hear the panchayat’s decision. What should she do and where should she go with her little innocent child? Lajo leaves the village without any destination, at the mercy of God. The kind-hearted Sain Das (Nazir Kashmiri) lends her support and she starts living with her son at her brother's house. Kaka grows up as Madan (Ravinder Kapoor) without knowing his father and becomes the darling of the village. An attractive handsome youth, Madan catches the fancy of a beautiful village belle Nimmo (Indira Billy), the daughter of Laalu (Qamar Sarhadi). Both of them would fight and have fun at the same time. Paro, the sister of a drunkard Gopala, also loves Madan. But Madan does not respond to her advances. However, Paro is quite sure that one day she will be able to get Madan from Nimmo.
Madan is determined to free the villagers from the clutches of an evil money-lender Ramu Shah (Jeevan) and for this, he seeks the help of his friend Banta Singh (Dharmendra).
On the other side, Ramu Shah's son Chaanan (Kharaiti) stakes claim over everything in the village, because everyone in the village is in his father’s debt. Accordingly, he also believes he has a right to Nimmo’s affections and desires her. However, Nimmo is not interested in him and ignores all his pleadings. She even scolds him in public view.
Madan takes the help of his friend Banta Singh, who is an example of valour and dignity, to organize the villagers against the highhandedness of Ramu Shah. He frees them from the shackles of the bloodsucker money-lender while teaching them the benefits of cooperative farming. Everyone vows to support Madan.
After his release from prison, Kartara (Uma Dutt) comes to Ramu Shah's house and asks to return the looted booty kept with him. Ramu Shah is taken aback. With Kartara’s money, he had gone from being a poor potter to a money-lender. Instead of returning the money to Kartara he gets him drunk and throws him out into the forest. The next morning, Madan happens to notice the wounded Kartara, and takes him home. When Lajo sees her husband, tears roll down her cheeks. Kartara is also very happy to know about Madan, his strapping young son. Lajo tries to stop Kartara from leaving, but he flees for fear of being caught by the police.
Meanwhile, Madan buys a tractor with the help of the government and starts doing cooperative farming. Ramu Shah is jealous of Madan’s success. He tries to divide the people of the village. After Banta’s refusal to help him, Ramu Shah tries to enlist Gopala Sharabi (Baldev Mehta) to eliminate Madan. But Gopala himself becomes a victim of this conspiracy and dies amidst the burning crops. Finally, Ramu Shah uses Paro, under the guise of false sympathy, and makes a false case of theft on Madan. The situation gets reversed in the court and the evildoings of Ramu Shah are exposed. The real identity of Kartara Daku is also established. Madan is acquitted by the court and marries Nimmo.