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Naamkaran is the story of little Avni, an illegitimate child, whose father Ashish and her mother Asha/Ayesha are not married but consider themselves as husband and wife. Despite being unmarried, Asha applies sindoor on her forehead to avoid social problems. Asha and Ashish still have a live-in relationship, unknown by the rest of the world including Ashish's family and his mother, Dayawanti. Avni, however, gets continuously teased by others because of the absence of her father. She deeply wishes for her family to become a 'normal' one but her father stays away most of the time due to his mother Dayawanti.

Back in 1981, a misunderstanding and a riot between fellow Muslim and Hindu villagers in Dayawanti's village resulted in Dayawanti losing her husband and since then, Dayawanti has hated Muslims. Though her sons and daughter did not know about the event, they knew about Dayawanti's hatred towards Muslims and this prevented Ashish from ever opening the topic of his relationship with Ayesha in front of Dayawanti. However, upon Avni's continuous insistence to come to her annual sports day, Ashish finally bears up the strength and informs his mother, through email, about his relationship with Ayesha, his daughter Avni and his not-yet-born child. Dayawanti fails to accept a Muslim daughter-in-law. Also, by then, Dayawanti had already given her word to Hemant, diagnosed with brain tumor, about getting Ashish married to his daughter, Neela. Dayawanti uses the situation to her benefit and convinces Ashish to get engaged to Neela.

At one point of time, after Ashish gets irritated as a result of his mother's continuous insults towards Asha and Avni, Ashish decides to go and live with Asha and Avni. Dayawanti doesn't stop, however. She performs a suicide drama and is successful in bringing Ashish back. After this, Ashish does not return back to Asha and Avni again, lest his mother should perform a suicide attempt again.

Avni realizes that she needs to face life on her own and that she had to overcome all possible hurdles if she wanted to have a 'normal' family. She joins a fashion show, but soon learns her sponsor is Dayawanti, and is kicked out. Soon, she meets Neela and becomes friends with her. Neela learns Avni's story. She is heartbroken for having lost her love, but angry upon Ashish for having cheated both her and Ayesha and for not standing up for his love despite Dayawanti's hatred.

Avni decides to make a movie on her life. She makes the movie successfully. However, just before the release, Dayawanti gets informed about it, and in her efforts to stop the release before the deadline, Asha goes into coma as a result of an accident planned by Dayawanti.

Asha gives birth to a baby boy (Aman). Eventually, she wakes up and talks with Avni. Avni goes to inform the rest of the family that Asha has woken up from coma. On the other hand, fraught from the news of Asha's survival, Dayawanti comes to the hospital and kills Asha by suffocating her.

Soon after Asha's death, Dayawanti seizes the legal custody of Aman leaving Avni with no other option other than of moving to the Mehta House. According to Dayawanti, since Amol (as she did not accept the name Aman decided by Asha) had not had her own mother's milk, he was pure and bereft of the ill-culture of those 'other people'.

Avni's days at the Mehta House are difficult. Faced by the problem of untouchability by the Mehtas, Avni is not allowed to even be with her own brother. Dayawanti often sees Avni worshipping both the religions and is not able to bear her offering Namaz

Events occur that finally convince Avni that her mother's death was indeed a murder. Avni opens a formal investigation into the case. The unusual behavior of Dayawanti causes Avni to suspect her. Upon further investigation, Avni learns that Dayawanti was the one who had killed her mother. Despite every effort to find proof against Dayawanti, Avni fails to find any due to Dayawanti's carefulness. Avni's friends finally come up with the idea of making Dayawanti suffer hallucinations. This finally results in Dayawanti accepting her crime in the court.

However, Ashish does not accept the fact that his mother had killed Asha. Ashish meets his mother in the jail the next day, and is told by Dayawanti that Avni had killed her own mother. Having no doubt about his mother's innocence, Ashish believes the surprising fact of Avni killing her own mother and orders the police to arrest Avni. After a lot of search, Avni is finally caught and sent to the remand home.

However, Dayawanti is not satisfied with Avni being in jail owing to her fears about the future. She plans to kill Avni. Neela foils Dayawanti's plan, rescues Avni and takes her to a safe place. They decide upon leaving for New York. Dayawanti gets to know about their plan and meets with Avni upon her request to meet Aman for the last time before leaving for New York. However, Dayawanti shoots Avni with a gun in the chest and Avni falls over the cliff into a lake below. The story then takes a leap of 15 years.