Farhan Qureshi (R. Madhavan), Raju Rastogi (Sharman Joshi) and Ranchhordas Shyamaldas Chanchad (Aamir Khan) are three students who share a room in the residence of the fictional Imperial College of Engineering (ICE). Farhan is studying engineering to pursue his father's wishes, over his own passion for wildlife photography. Raju is studying to get his family out of poverty. On the other hand, Ranchho studies for his simple passion in machines. Rancho believes that one should follow excellence, not success, as success will take care of itself if excellence is followed. However, this different approach is sneered upon by the college director, Dr. Viru "Virus" Sahastrabuddhe (Boman Irani). Virus's favourite student, Chatur Ramalingam (Omi Vaidya), known by the ICE community as "Silencer", believes in mindless memorizing over understanding in order to reach his goals of corporate status. Raju, who is initially annoyed by Rancho's methods, moves in with Chatur, where he fares worse. In order to impress Virus on Teachers' Day, Chatur, with the help of the college librarian, Dubey, writes a speech in pure Hindi which he will memorize to deliver on stage. Rancho decides to teach him a lesson and provide Raju with an example. Chatur, due his lack of knowledge in Hindi, mindlessly memorizes the paper, of which Rancho had secretly changed a few words (e.g. "chamatkaar" (miracle) was changed to "balatkaar" (rape)). Chatur delivers this speech in front of Virus and the Education Minister, and becomes the ridicule subject of the night. Highly insulted and driven to vengeance, he swears retaliation and bets that he will become more successful with his methods than Rancho. Meanwhile, Raju's paralyzed father goes into a cardiac arrest, and is saved in the nick of time by Rancho and Pia (Kareena Kapoor), Virus' daughter, a medical student who is doing residency in the city hospital. This makes Raju genuinely change his mind about Rancho and becomes his bosom friend along with Farhan. Rancho falls in love with Pia, and she reciprocates. Angered, Virus continually attempts to break Rancho's friendship with Farhan and Raju. However, they stick with Rancho always, who continuously comes first in every exam, while they are always last, barely passing, due to Farhan's photography passion, and since Raju is a scared man. Things further escalate four years later when the three friends drunkenly break into Virus's house one night, in order for Rancho to finally profess his love for Pia. Unfortunately Virus finds out about this and catches them in a classroom the next day. Virus threatens to rusticate Raju unless he pins the drunken incident on Rancho. Not wanting to betray his friend or let down his family, Raju attempts suicide and ends up in a coma. With two months of extensive care from his mother, Rancho, Farhan, and Pia, he makes a full recovery and thus discards his fear of the future, adopting Rancho's outlook. His frankness impresses the corporate agents during a job interview and they hire him. Farhan, goaded by his friends, convinces his parents to allow him to drop out of school and follow his wildlife photographer dream. Furious, with his dignity and pride ruined as a result of Farhan managing well with his future and Raju getting a job, Virus schemes to set Raju an impossibly tough final exam, as the job offer is contingent on graduation. Pia learns of this and informs Rancho and Farhan, who break into Virus's office for the exam. However, Raju, with his new-found attitude, refuses to cheat and throws the paper away. Virus catches them, beats Rancho with his umbrella, and expels them on the spot. Pia angrily confronts him, revealing that her brother, whom their father had pushed to become an engineer despite his preference for literature, committed suicide after failing ICE's entrance exam three times. After revealing this secret, a sobbing Pia then flees to her hospital....
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