The story of the film revolves around a palace known as ‘Gandharva Mahal’ which belongs to Rayudu, the present head of a royal family that has lost its former splendor. Rayudu lives with his wife and two daughters Visalakshi and Jagadha in a small house beside the Mahal. Rayudu rents out the palace to make ends meet. He is shown as a soft and generous man. Some of the tenants take this generosity for granted and harass Rayudu, without paying the rent. Into this scenario comes Manoj, as someone seeking a place to rent. He slowly gets rid of the problematic elements in the palace and restores control to Rayudu. Manoj falls in love with Jagadha. A happy Rayudu decides to get Visalakshi married and decides to give away the Gandharva Mahal as dowry. One night, Manoj comes to Rayudu with a bloodied nose and claims that he saw a ghost which tried to kill him and warned him about selling the Mahal. Rayudu reveals that the ghost might be his dead father, Rudramaneni Narsimha Rayudu and explains the history of Gandharva Mahal to Manoj. Gandhrva Mahal has been with the Rudramaneni family for centuries and was passed on to Narasimha Rayudu, a Zamindar who is well respected in the village. He lives with his wife and sister Jagadamba. He marries his sister Jagadamba to Phanindra Bhoopati. Few days after the marriage, Bhoopati insults Narsimha Rayudu and asks him to give their share in the family property. Deeply hurt by the incident, Narsimha Rayudu gives half of everything he owns including the Gandharva Mahal to his sister and walks out of the house. He also gives hundred acres of land to Seshayya, his trusted employee and friend. It is later revealed that Bhoopati married Jagadamba only for the money and wants to marry his sweetheart Amrutha Valli. Amrutha doesn't want to marry Bhoopathi since he already has a wife. Consequently, Bhoopathi kills Jagadamba and makes it look like a suicide.