The film opens into the life of Ammaiyappan Mudaliar (Visu), an ordinary middle-class man who makes a simple living as a Central Government clerk. His family, a typical South Indian joint family, includes his dutiful wife Godavari, his oldest son Chidambaram (Raghuvaran), a junior officer at Indian Oil, and his wife Uma (Lakshmi), his second son Siva (Chandrasekhar), a factory worker, his youngest son Bharathi (a never do good fellow who has failed his high school exams twice) and his daughter Sarojini (Ilavarasi). The modest income from his government job barely provides for his family's needs. His sons contribute some amounts in proportion to their incomes. The family gets by, but Ammaiyappan worries for the future. Siva and Sarojini are not yet married, and Bharathi has a bleak future if he does not graduate high school. Sarojini is a particular worry; her beauty and charm are matched by her arrogance and contempt. She summarily rejects any marriage proposal, and her obstinate demeanor causes great concern to Ammaiyappan.

The community matchmaker brings Ammaiyappan a promising alliance. The groom is a junior officer at BHEL and his father owns a garment shop in the city. But Sarojini, true to form, rejects the alliance and the groom's party abruptly leaves. Ammaiyappan visits them to apologize for the incident. The groom's father turns out to be an understanding and forward thinking man. Looking past Sarojini's immaturity and recognizing Ammaiyappan to be a good and honest man, he offers his daughter Vasantha as a prospective partner for Siva. He declares, as a veiled insult, that his obedient daughter Vasantha will accept his decision. Not outdone, Ammaiyappan quickly accepts with the claim that his son is similarly respectful of his wishes.

When Ammaiyappan returns home, Sarojini informs him that she has found her own partner in Peter Fernandes, a Catholic colleague from her work place – an unthinkable notion for Ammaiyappan and Godavari. But when Ammaiyappan visits Peter's father Albert Fernandes, he is surprised. Albert Fernandes turns out to be compassionate, tolerant and accepting of Sarojini's belligerence. Ammaiyappan agrees to the alliance. Chidambaram remains opposed to Sarojini's choice, but nonetheless obtains a loan to finance her wedding. Sarojini and Peter are married, and Siva and Vasantha are married.

After an initial period of honeymoon bliss, the troubles start again. Sarojini returns home late one night after an office party, with another male colleague on a bike. When Peter's father questions her, she brashly cites her independence and refuses to answer him. Peter tries to talk to her, but she adamantly turns him off too. After a big fight, she walks out. Back at Ammaiyappan's home, Vasantha is frustrated because her time is increasingly devoted to tutoring Bharathi (so he can clear his exams). She is unable to have any quiet time with Siva, and this is further complicated by the joint family arrangement where personal space is limited anyway. She ends up in a big fight with Siva, and she ultimately walks out.

Vasantha returns to an unwelcome reception at her own home. Her father initially tries to reason with her, but when she remains indignant, he firmly instructs her to return to her husband and work out their problems. She finally understands the message and returns home. Siva, who had followed her, reinforces her father's message. However, he clearly prioritizes Bharathi's education over her need for quiet time. She accepts this as a temporary necessity, but remains unhappy nonetheless.

There is a greater crisis when Chidambaram reduces his monthly contribution to the family fund. He cites reasons of reduced consumption (his wife is away at her parents’ house due to pregnancy), excess burden (Sarojini, the troublemaker, has returned) and limited income (he has to plan for his own family). Ammaiyappan advises him that the fund is not designed as a mathematical fraction but rather as a communal fund to ensure the family runs smoothly. He reminds Chidambaram that he had spent the largest fractions of his income, without regard to return or reward, on Chidambaram's upbringing and education. Chidambaram disputes these claims. The argument erupts into a terrible fight. Ammaiyappan disowns Chidambaram and kicks him out. Chidambaram refuses to leave until his loans are paid off. Ammaiyappan orders a line to be drawn midway through the house. He banishes Chidambaram to one side of the line and forbids everyone from speaking to Chidambaram. Ammaiyappan declares that Chidambaram must leave when his loans have been repaid.

When Uma returns with her new baby, she is shocked to find so many problems. She works with Kannamma (Manorama), the longtime household maid and Godavari (Ammaiyappan's wife) to fix these troubles and restore harmony. She starts by visiting Albert Fernandes. On her suggestion, Mr. Fernandes returns to Ammaiyappan's house and starts a loud squabble with Kannamma. Mr. Fernandes brings divorce papers. Sarojini is shaken. Kannamma and Godavari compel her, in the heat of the fight with Mr. Fernandes, to sign the papers. Mr. Fernandes completes the charade by handing her an invitation to Peter's upcoming wedding with another girl. Sarojini finally realizes the gravity of the situation. She returns to Peter and his father. They forgive her and warmly accept her again.

Uma's second task is to reconcile Siva and Vasantha. She calls Siva at work and gently rebukes him for not attending to his wife's needs. Siva plans a vacation where he and Vasantha are able to revive their relationship, reaffirm their priorities and return to a new life together. Vasantha continues tutoring Bharathi. Bharathi finally passes his exams. Uma has mixed feelings: she is glad that the troubles have been resolved, but she is sad that Siva and Bharathi, still in compliance with Ammaiyappan's orders, have not spoken a word with her.

Finally, Uma tackles the raging conflict between Chidambaram and Ammaiyappan. She scans his expenses and reminds him that costs are actually reduced when items are obtained in larger quantities. She also reminds him that Ammaiyappan does not charge rent and also reminds him of his filial responsibilities. In the meantime, Kannamma reminds Ammaiyappan that his family is all he has, and that he should think of his children and grandchildren as his legacy and not his adversaries. Chidambaram and Ammaiyappan are finally reconciled.

Uma makes her final move when Chidambaram is about to step across the line. She reminds everyone that what started as small arguments ended up as a huge conflict that nearly broke up the family. She suggests that it is best for her and Chidambaram to move out. The house is probably too cramped for two couples (in addition to Ammaiyappan and Godavari) to be comfortable. She promises to visit every weekend and spend time with the family.

The film ends with Chidambaram and Uma making regular visits to see everyone.

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