Sivaji film begins with a masked person(Rajini Kanth) brought to the Central Jail in Chennai, India.When asked by a fellow-inmate for the reasons behind his imprisonment, the masked person replies that he is imprisoned for attempting to do good for the people. The unmasked person is revealed to be Sivaji (Rajinikanth). The story then winds into a flashback that shows him returning from the United States as a software systems architect to Chennai.
He brings with him earnings of up to 250 crore rupees, with an intention to begin a charity organization called the Sivaji Foundation. This organization has the aim of building hospitals and educational institutions to serve the poor without any charge. However, he faces the obstacles of bureaucracy and corrupt officials. Forced to set aside his principles, Sivaji bribes his way through the system. Though at one stage, unable to deal with spiraling costs,he even mortgages his palatial house and personal property in the process.
Adiseshan (Suman), a highly influential businessman, sees Sivaji Foundation as competition to his own business empire. Using his political strings, he repeals the permits issued to the foundation by the government. Sivaji approaches a lawyer, using his own car to pay the lawyer's fee. However in court he is forced to admit he bribed numerous officials. This undermines his case and the judge reiterates the stay order on construction by the Sivaji Foundation.