Satya arrives in Mumbai in search of work and finds a job at a dance bar. Jagga, a criminal, throws the glass of whiskey that Satya prepared for him in his face because he dislikes the taste. Later another small time goon Pakya, who works for Jagga, demands money from Satya. Satya refuses to pay and slashes Pakya's face with a razor. Pakya tells Jagga about the attack, and Jagga's goons beat Satya. A film producer is murdered by Bapu and Vitthal Manjrekar on the orders of Bhiku Mhatre. Manjrekar is captured by police during the getaway and admits Mhatre's involvement to Inspector Khandilkar during questioning; Mhatre is arrested.
Jagga makes fun of Satya when he is serving drinks; they fight, and he later frames Satya for procuring. Mhatre and Satya fight in prison, and Mhatre, impressed by Satya's courage, arranges his release through lawyer Chandrakant Mule. Satya is given a flat by Kallu Mama and meets Vidya, his neighbour and an aspiring singer. Manjrekar denies any link to Mhatre in court, and Mhatre is released. With Mhatre's help, Satya shoots Jagga in the dance bar and joins Mhatre's gang. Malhotra, a builder whom Kallu Mama extorted, asks them to meet him for the money and Mhatre, Satya and the gang are ambushed. Under questioning, they admit to working for Guru Narayan. Vidya is initially rejected by music director Renusagar, who later signs her for a project after Satya threatens him. Vidya and Satya begin a romantic relationship.
Guru Narayan arrives in Mumbai. Mhatre and his gang are ready to kill him but are forced to abandon their plan on orders from politician Bhau Thakurdas Jhawle. Bhau asks him and Guru Narayan not to endanger his career with a gang war. Guru Narayan says (over the phone, to Bhau) that he wants to kill Satya to avenge Jagga's murder. This conversation is not heard by Mhatre, who (under Bhau's pressure), agrees to call it evens with Guru Narayan.
However, Satya later tells Mhatre that if they do not kill Guru Narayan, he will kill them. Mhatre gang, then kill Guru Narayan. This brings Mhatre and Satya in direct confrontation with Bhau. A new police commissioner, Amodh Shukla, is appointed because of the increase in crime. In a strategic move, Bhau forgives Mhatre and his gang for their earlier actions. The police encounter a group of criminals, including Mhatre gang member Chander Khote (Snehal Dabi). At Satya's suggestion, Shukla is shot by his gang to alarm the police. Bhau wins the election by a landslide, thanks to Mhatre's help.
Satya and Vidya go to the cinema. When they step out for a drink during the intermission, Pakya sees Satya and informs the police. Inspector Khandilkar arrives and orders all the doors locked except one, expecting to apprehend Satya when he leaves the cinema through the single open door. Satya shoots a blank cartridge at the ground, creating a stampede, and escapes with Vidya. He is afraid of losing her after the incident, and Mhatre offers to move them to Dubai. Mhatre arrives at Bhau's house that night to celebrate his election victory with Kallu Mama and Chandrakant Mule, and the politician kills him for disobeying his order and killing Narayan. Satya tells Vidya he has a job in Dubai when the police arrive, and he is forced to escape. Vidya learns from Inspector Khandilkar that Satya is a criminal.
Satya arrives at Kallu Mama's residence. Mule orders Mama to kill Satya but Mama rebels and kills Mule instead, prompting the two to avenge Mhatre's murder. During Ganesh Chaturthi at a beach, Satya kills Bhau and is wounded. He and Mama leave; Mama plans to help Satya board a ship to Dubai, but Satya insists on going to Vidya's house first. Mama waits in the car while Satya knocks on her door. Vidya refuses to answer and, while they argue, Khandilkar arrives and shoots and kills Mama. Satya manages to break down Vidya's door, however, Khandilkar shoots him, and he collapses a few inches from her and dies.
... It suddenly struck me that you always hear about these gangsters only when they either kill or when they die. But what do they do in between? That was the first thought which eventually resulted in Satya.
Director Ram Gopal Varma, fascinated with Mumbai, wanted to return to making action films after a long break. While he was planning the film, Varma encountered some people from the underworld and became interested in their human side.[5] Music producer and singer Gulshan Kumar was shot dead outside the Jeeteshwar Mahadev temple in Mumbai on 12 August 1997.[6] Varma learned about the murder from Jhamu Sughand, who had produced Rangeela.[4] Sughand told Varma that Gulshan had awakened at about 7 am and told the producer he would meet a singer at 8 am and a friend at 8:30; he would then go to the temple and meet him afterwards.[4] Varma then thought, "If Gulshan had woken up at 7 am, then at what time would the killer have woken up?"[4] He then decided to make a film about gangsters and, as an Ayn Rand fan, wanted to "put Howard Roark in the underworld".[7]
Varma had intended to leave songs out of the film, but " ... at that time it was very difficult to make a film without a song since the music companies were almost 'ruling the industry' and it was impossible to promote a song-less film".[7] With a basic story in his mind, the director wanted Vijay Tendulkar to write the film's dialogue; he admired Tendulkar's work, particularly Ardh Satya (1983).[7] However, Tendulkar was unable to work on Satya.[7] The film was edited by a newcomer Apurva Asrani, who edited the trailer for Daud and Bhanodaya. Impressed by his work, Varma offered Apurva the editing position on Satya when he was nineteen years old.[8] Varma incorporated several scenes from real life in the film including the scene were Mhatre abuses one of his dead friend on how he could die.[9] One of his friends told him that his neighbor was a criminal whom he used to greet every day but could not guess that he was involved in crime. Varma liked this angle and used it in the film as well.[9] Varma said that the characters in the film "are at a very low level of the gangster hierarchy".[9] On the film's title, Varma said that he named it Satya for two reasons: one being a homage to Ardh Satya and the other one was a namesake girl whom he used to love in college who did not love him back.[9]
A struggling Manoj Bajpayee auditioned for the role of Paresh Rawal's henchman in Daud, and Varma asked him if he had done any other film work; Bajpayee mentioned his supporting role in Bandit Queen.[10] Varma, impressed by his performance in Bandit Queen, said that he wanted to give him a bigger role and advised him not to do Daud.[10] However, Bajpayee wanted to appear in the film and Varma agreed.[10] After filming was completed, Varma told Bajpayee that he regretted giving him a minor role and promised him a prominent role in his next film.[11] Bajpayee suggested newcomer Anurag Kashyap's name to Varma for the screenplay.[12] Varma liked Kashyap's Auto Narayan, and signed him to write the script.[13] Although Kashyap was already writing the film, Varma felt that he needed a more experienced writer and asked Saurabh Shukla. Shukla was initially hesitant, since he wrote films he could direct.[7][14] He went to Varma's office to decline, but the director told him that he wanted to cast him in the film and outlined the plot.[14] Shukla then agreed to do the film, since he was "stuck" with the narration.[7] They went to Varma's farmhouse in Hyderabad and wrote the first draft in a week without doing research, since Kashyap felt that a gangster's psychology is "very similar to anybody else".[15][16] Bajpayee had never met any gangster in his life and was not good in speaking Marathi language, although he was playing a Maharashtrian character. He then decided to first work on his external look and grew a beard, a heavy face and curly hair. He took suggestions from his maid on how to get the nuances of the Marathi accent and worked on the character for three to four months before filming began.[17]
Varma wanted to cast new actors in the film. He cast J.D. Chakravarthy, who had worked with him on Shiva (1990), in the title role. Chakravarthy said that he tried to imitate Varma to prepare for the role.[7] The title role was initially planned for Bajpayee, but after the characters clarified for Varma he felt that he needed someone more fluent in Hindi for Bhiku Mhatre;[7] Chakravarthy, a native Telugu speaker, was not sufficiently fluent in Hindi.[7] Bajpayee was unhappy with the decision since he wanted to play the title role, but agreed to remain on the film because no other role was available.[7] He based the character of Bhiku Mhatre on a person from his hometown who was a Jeetendra fan, wore coloured T-shirts and was short-tempered; he took the accent from his cook who was from Kolhapur.[7][18] He also gathered his own costume from 25,000 given to him by the production.[18] When Shukla and Kashyap were discussing authentic-sounding character names, an office boy named Bhiku came in, and they decided to use his name for a character.[15] Although the female lead was initially offered to Manisha Koirala but she had no dates, later same with Mahima Chaudhry, but later replaced by Urmila Matondkar, with whom he had worked in Rangeela and Daud.[19] Newcomer Sushant Singh was cast as Mhatre's henchman.[20] Matondkar's costume was designed by Manish Malhotra.[18]
Satya was filmed in Mumbai during the monsoon season.[21][22] The scene where Sushant Singh's face is slashed by Chakravarthy was supposed to end there, but Varma forgot to say "cut" and the rest of the scene was improvised by the actors.[23] The film's opening montage, when Chakravarthy arrives in the city, was given to Kashyap to shoot. He planned the scene and filmed it with the cinematographer.[24] The scene was very different from what Kashyap had imagined because of his inexperience in filming. Varma instructed him to re-shoot it and taught him how to communicate with the cameraman.[24] Several scenes in the film were improvised, including the entire death scene of Bhiku Mhatre.[25]
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