Of the film, Bhatt has stated that he did not want Horror Story to contain any songs or any sex scenes.[7] He also remarked that he wanted to avoid casting "big stars" in the film, as he believed that they "cannot turn the audience fearful" in what he termed as a "hardcore horror film".[7][8] Ravish Desai has commented that the movie will be the first in a franchise and that planning for further films has already begun.[6]
Bhatt had earlier made films in the same genre, namely - 1920, 1920: Evil Returns and Haunted. In an interview, he had commented, “While [my]Raaz 3 and 1920 were romantic sagas with songs and full-on drama, this one is more of a Hollywood kind of drama. The horror lies in the story.” [9]The film opens with a man entering deserted hotel Grandiose all by himself. He proceeds to room 3046, and for reasons unknown, he then goes to the terrace and jumps off to the ground, killing himself. The plot then moves to seven friends - Sam alias Samrat, Magesh, Achint, Neel, Neena, Sonia and Maggie who reunite after several years apart to celebrate the farewell of one of their friends, who is going abroad for higher studies. At the pub, they learn on the news broadcast about an abandoned hotel with a reputation of being haunted. Apparently, the hotel had originally started out as a mental asylum for the criminally insane, but was almost completely destroyed in a fire, the origin of which has never been fully explained. After years of sitting in neglect, rumors began to circulate that the place was haunted. Despite this, a builder decided to refurbish the ruins into a five star hotel, but was unsuccessful and committed suicide as a result- although rumors state that he was pushed by a ghost of one of the asylum's inmates. Intrigued by these rumors, the group decides to explore the abandoned building, but soon come across strange and inexplicable occurrences, much against the warnings of the barman.
The group of seven arrive at the hotel, but find that it is locked. It would be as though something is warning them to keep away, but Sam, the most hyperactive of all, remains adamant on entering. The group decide to leave, but then on hearing a radio playing somewhere, they think that there must be someone inside, and try to gain entry through the back door. They do find one and enter the hotel. As they proceed in, the door closes behind them and disappears into the wall. The group starts to explore the hotel. With Sam leading everyone and trying to play the fool and scare everyone, Neena starts to observe strange things, but Neel brushes her claims aside. They then come across a room with a TV set on with no transmission or power, and a voice saying "welcome". Still not taken aback, they proceed to room 3046, a supposedly notorious suite room, and here Sam is killed first when he enters the bathroom on hearing someone turning on the shower. The group then flee the room in chaos and panic, too shocked to believe that Sam has been brutally killed by someone or something, but to their utter shock, they are not able to find the door through which they came in. The six of them realize that they are trapped inside the hotel with no way out.
Magesh and Achint decide to go to the terrace to gain network range for their mobile phones. But on the way, they are confronted by ghostly figures, and Magesh is killed by one when he tries to approach a moving wheelchair out of curiosity. Achint goes into hiding, and when Magesh and Achint don't return, the remaining four go in search of them. Achint is found and the group heads towards the terrace, when they are attacked by a ghostly looking woman, who now starts to terrorize them. Sonia gets stuck while escaping and is dragged into the darkness by the ghost, while the others make a miserable escape to elsewhere in the hotel. With three people dead, the remaining four decide that they must stay together because the ghost attacks them when they are alone. So again, they move to find an escape. Soon they are confronted by Sonia, whom Achint and Neel think is just the ghost trying to get them, but a tearful Sonia tells them that it is she, and that she was taken to some room where she came across some material. The group read it and come to know that the hotel was first a mental asylum, where a possessed girl named Maya was admitted after she murdered all her family members. Maya would always claim to have 'married the devil', and would become very violent at the hospital, even killing the treating doctors. One day a fire broke out, killing all the inmates. A hotel would be started at the site, but that too would not run because of strange happenings. The group soon realize that it is Maya who is terrorizing them.
Sonia tries to contact Maya to know what she wants, at which she gets a call from Maya, saying that the spirit wants to kill them all, nothing else. The terrified group then decide to stay together, no matter what might happen. Soon they realize that Sonia is actually dead and it is Maya speaking through her. The remaining four (Achint, Neel, Maggie and Neena) now flee to the basement and find an abandoned jeep, which they start and try to get out of the hotel, amid-st ghostly apparitions and blockades. After a tiring drive, through misty areas, the group reach someplace new, only to find that they are back at the door of room 3046. Then they realize that the only way to escape is to survive till dawn. Neena asks the time from Neel only get to know that it is the same which she had seen on the clocks in one of the rooms shortly after entering the hotel. Believing that it is some kind of intuition, they decide to go back to same room to understand Neena's extrasensory perception. They find a book which has paranormal explanations and a way to locate the energy source of dark spirits. With the help of incantations from the book, they have hallucinations about the past when the hotel was actually a mental asylum where they find out the energy source of the dark spirit in a shock machine. They decide to burn it down to end the horror. Neel and Maggie go to kitchen in search of inflammable where Maggie is killed by Maya. Back in the room, Achint is beheaded by the spirit leaving only Neel and Neena alive.
Neel calms Neena down and tries to burn the machine, before he is pulled by the spirit into the nearby closet. Then the spirit starts terrorizing Neena and pushes her out to the main hall. After regaining her composure, Neena creates a flame and decides to finish the task and amid-st ghostly apparitions and obstructions, and with the help of the business man's spirit (who dies in the beginning of the film) that now appears, she manages to burn the machine down, resulting the destruction of Maya's spirit. The film ends with the opening of entrance doors of the hotel and being the only survivor, Neena walks out of the hotel.
