This is a children's fantasy tale set against a contemporary background.
There is this old mansion "Thrikal Bhavan" on way to the school. It has a reputation of being haunted by a spitit who guards a buried treasure there. The children Laxmi, raju and Chintu (Sonia, Suresh and Mukesh) are fascinated by the stories told by their Rickshaw Wallah (Singaram). He spins great yarns about the pranks of this spirit Chetan. Yes! that's the name of this spirit. Once the spirit befriends you it can grant all your wishes... so were the children told!!
Now, there really existed a spirit in that house. It was actually brought in by an evil Tantrik (Kottarakkara) to dig up the buried treasure. To drive away competition, one day the evil Tantrik uses the spirit to eliminate Baba Khondol (Shakti Kapoor) an occultist brought along by two fortune seekers Raja (ravi Baswani) and Rajkumar (Harish). Undeterred, the duo (raja & Rajkumar) bring with them a Computer Astrologer named Professor Chashmish (Satish Kaushik)-who is also devoured. In both the situations the duo manage to escape with injuries.
One day, in the absence of the evil the three children steal into the mansion and unwittngly set loose the spirit. In the ensuing fury unleashed by the formless spirit, the children are terrified . So to soothe them the spirit comes in the form of little boy(Arvind). The evil Tantrik on return finds that his precious spirit has flown the coop.
The dreams the children nurtured in their minds-chetan fulfills them. He takes them for a walk on the ceiling. He animates their Rickshaw to cause wonder among the general population of the town. He cures Laxmi's father's(Dalip Tahil) alcoholism and in the process wrecks Raju's father's (G.K. Pillai)bar. He cuts the classroom bully down to size and scares the pants off the villainous Biology master(Rajan p.Dev). He sneaks them into an erotic dance show and manages the clothing and unclothing as per Laxmi's sense of decency. Well, he also brings baloons and chocoin between all these. By then..the Tantrik had caught up with them.
Meanwhile, the duo Raja & Rajkumar were at work. In their search for an able person with ample magical powers to counter the evil Tantrik, they come across an unlikely savior in the form of a stage magician-a young girl called Miss Hawa Hawai (Urmila). She reveals to them that the evil tantrik had once stolen the spirit Chetan from a Grand Tantrik (HarishTrivedi). And she, the daughter of this Grand Tantrik in obeyance to her late father's wish had ever since been in search of the evil Tantrik to retrieve the spirit. The duo agree to help her and they take her to the evil Tantrik, when the duo and the girl reach the evil Tantrik, he had already caught hold of Chetan. The Girl interferes and a magic duel between her and the evil Tantrik ensures. His curse transfoms her into a cat.
It takes the combined efforts of the duo and the children to restore the girl Magician back to her true form. With their help and her magical powers Chetan is released from the magical clutches of the evil Tantrik. But to protect the rest, Chetan is compelled to disintegrate the evil Tantrik. Now an ancient curse gets hold of him where Chetan has to forgo his form and reincarnate himself into a fox-bat-this as he had killed his master, a Tantrik. As the children look an helplessly, the girl takes leave with the winged Mamal-with a promise that she shall someday restore Chetan to his true magical-self.
