The film starts with a sad Radhika (Sonali Bendre) being introduced to an Army Major (Parmeet Sethi) by her father, Raja Saab (Shakti Kapoor), an erstwhile king and current politician. Raja Saab tells her that the Major will be a good husband for her. On the day of the engagement, news breaks of a terrorist attack in a nearby village led by the terrorist, Shaka (Ajay Devgn). The Major and Raja Saab leave with a large force to that village.
But that turns out to be a ruse as Shaka comes to the place of the engagement and burns the marriage Mandap (hall). Then he gives a long look to Radhika, who looks at him with hatred, and leaves. Shaka reaches his lair, where he meets his leader, Dara (Amrish Puri) and Shabnam (Madhoo) and the rest of his gang. Dara welcomes him and proclaims him to be Diljale. Shabnam (Madhoo), who loves him, tries to hug him, but Shaka rebuffs it.
Shaka then goes to visit his mother (Farida Jalal), where the story of Shaka is shown in a flashback. Shaka was originally Shyam, a patriotic college student and son of a local village leader. Radhika studies in the same college, and they both fall deeply in love. When Raja Saab tries to usurp all the village land, Shyam’s father organises all the villages against him. Raja Saab bribes a local police officer (Gulshan Grover), who proclaims Shyam’s father as a terrorist and kills him in an encounter.
When Shyam goes to Raja Saab’s home to take revenge, Raja Saab (who knows of their love affair and feels it is below his family’s dignity) frames Shyam also as a terrorist and tries to kill him. Shyam escapes, but Radhika, who only sees him threatening her father, berates him and proclaims him a terrorist. Brokenhearted, Shyam joins Dara’s group and becomes Shaka. Back in the present time, the Major surrounds Shaka at his mother’s home but finds himself outnumbered by Shaka’s men. Shaka asks him to go away. The Major then confronts Radhika and asks her if she knows Shaka from earlier. Under pressure from Raja Saab, she denies knowing Shaka.