Thuruppugulan story is focused on Kochuthoma (Innocent) and his son Kunjumon (Mammootty). Kochuthoma is running a typical street side "thattukada" in Kochi. At the age of ten, Kunjumon accidentally injures a person. After the incident when his son faced trouble to stay at Kochi, Kochuthoma sent him to Kozhikode to stay with his dear friend Swami (Jagathy).
A five star hotel, Raj Palace, originally owned by a multi-millionaire Chandrashekara Menon (Devan), is now run by Sreedharan Unnithan (Kalashala Babu) and his sons. Chandrashekara Menon had authorised Sreedhran Unnithan to manage the hotel, when he had to go to Singapore for business purpose. But Unnithan and his wicked sons trapped Menon by sending him into jail on false charges in Singapore.
His daughter Lakshmi (Sneha) comes to India to sell the hotel in order to acquire money for releasing her father from jail. Soon she came to know that Unnithan had transferred the five star hotel in his name. Lakshmi approaches Kochuthoma, who was her father's close friend and seeks his help to fight against them. Kochuthoma and his son Gulan Kunjumon supports her against their common rival, Sridharan Unnithan. The incidents, which follow, form the base of the story.