Lakhan Singh (Sonu Sood), a.k.a. Lucky, is the “kinng of the Australian underworld.” He is accompanied by his Sikh mafia associates, Julie (Neha Dhupia), Mika (Jaaved Jaffrey), Pankaj Udaas (Yashpal Sharma), Raftaar (Sudhanshu Pandey), Dilbaugh Singh (Manoj Pahwa) and Guruji Gurbaksh Singh (Kamal Chopra). In a small village in Punjab, the birthplace of Lucky, there lives another Sikh, Happy Singh (Akshay Kumar). Happy, though good at heart, has unintentionally caused many problems in the village, and the villagers are fed up with him. They decide to send Happy on a long trip to Australia with his friend Rangeela (Om Puri) to bring Lucky back to Punjab, which will keep Happy out of the village for some time and bring peace to the village.
But at the airport, Happy’s and Rangeela’s tickets to Australia are accidentally exchanged with those of Puneet (Ranvir Shorey), who was to fly to Egypt. In Egypt, Happy meets Sonia (Katrina Kaif) and falls deeply in love with her. But he does not express his love to her. Leaving her behind, he heads to Australia to meet Lucky. Lucky refuses to return to his hometown and throws Happy and Rangeela out of his house. Penniless, Happy finds warmth and affection in an elderly lady (Kirron Kher) who provides him with food in spite of being a stranger.
Lucky winds up in hospital, paralyzed, after a series of violent incidents that Happy causes. (In one of these incidents, his head is bumped severely, and the trauma from the resultant concussion is what paralyzes him.) Unexpectedly, Happy is given the position of the Kinng! The lady who helped Happy is obviously worried and depressed, as her daughter is returning from Egypt with her wealthy boyfriend, Puneet. The daughter does not know that after the death of her father years ago, her mother had become poverty-stricken and been reduced to work as a flower seller. Happy gives her Lucky’s spacious house and makes all his mafia associates work for her.
The lady’s daughter arrives—and to Happy’s horror, she is none other than Sonia! Happy, heart-broken, is forced to make a show of happiness to Sonia. Puneet says that he too would have had a good time with Happy and Sonia in Egypt had his ticket to Egypt not been exchanged in the airport, because of which he had ended up in Australia. Puneet had always been jealous of Sonia being with Happy; however, he doubts something is going on between them.