Narasimham featured Mohanlal in the role of Poovalli Induchoodan, who goes to prison for a crime which he has not committed. Induchoodan was selected for IAS training and in the success party one of his friends were stabbed to death by Ramakrishnan (E A Rajendran) the son of Moopil Nair(Narendra Prasad). Mooppil Nair and his acquaintance ex-minister Manappilli Madhavan Nambiar (Narayanan Nair) frames Induchoodan in the case with the help of Sub Inspector of Police (Bheeman Reghu) to take revenge of Induchoodan's father Justice Menon(Thilakan). Induchoodan is accused of murder and the case was judged by his father. Not trusting his son's words and based on material evidences Menon convicts Induchoodan of murder and sends him for 6 years imprisonment and resigns his job and flees to Bangalore with his wife (Bharathi). In the vacancy of Induchoodan Madhavan Nambiar's younger son (Saikumar) gets selection for IPS.
When the film starts, six years has passed, Induchoodan is released and Madhavan Nambiar is dead. . Induchoodan now into social activities with his friends including charecters played by Kalabhavan Mani, Vijayakumar and Sri raman stops Manappalli Pavithran N F Varghese from performing the after funeral rituals of Madhavan Nambiar and triggers the revenge.
Meanwhile Justice Menon and wife comes back to live with Induchoodan. In the mean time Induchoodan meets Anuradha (Aishwarya) daughter of Mooppil Nair and they fell in love with each other. Then it is revealed that Justice Menon had a secret affair with another woman and has a daughter (Kanaka). As a girl staying alone with little income, she goes to her father asking for identity and protection but was denied by the proud Menon. Enemies use this opportunity to defame Menon. Induchoodan knows all the truth from his uncle ((Jagathi Sreekumar) and assumes the protection of his sister.
Induchoodan asks his father of the truth and Menon denies to admit it. Then he tells his father she is going to marry the girl since she was not his sister. Frustrated Menon addicts to drinks and finally decide to admit the truth. He visits his daughter one evening and accepts her as daughter. Before anybody else knew it, the girl is Murdered and Menon is accused of the murder and is arrested. Now that father and son are again meets with bars in between them. But this time father is in the jail. Induchoodan trusts his father and brings his old acquaintance, a prolific lawyer Nandagopala Maarar (Mammootty). Maaraar uses his skills to destroy the crime plot and Menon is judged innocent.
Menon realises his fault of not trusting his son and dies after apologizing to his son. On his funeral, the enemies tries to take revenge on the same coin. In the subsequent fight, Induchoodan defeats the enemies, but lets them go. The film ends when Anuradha comes out of her home and Induchoodan accepts her as his life partner.It is a great action based movie