The story starts with the joining of a new English teacher, Rahul Prakash Udyavar (Shahid Kapoor), in Swaraswati Vidya Mandir School, situated in the outskirts of Mumbai's suburbs. Though he creates an instant rapport with students and teachers alike, he realizes that there is something amiss in this school. Slowly his doubts come true as the manager of the school, Sharma (Saurabh Shukla), makes many monetary obligations compulsory for the parents in the name of extracurricular activities. He goes to the extent of punishing the students inhumanely when the parents do not fulfill the new unjustified demands of the school. Day by day the stress level of the students increases, leading to unexpected and grim consequences. The situation becomes so explosive that it becomes a national issue. Paathshaala tries to answer many questions related to the sanctity of today's education system. The high morals and basic ethics of the teachings have taken a back seat. Profit and more profit have become a new mantra of educational institutions. Paathshaala is not afraid of telling the truth about the wrong doings of greedy educational institutes; neither does it spare them from exposing the use of unethical media activities for the children who are yet not ready for it.