The movie starts with the flashback of an incident which took place 70 years ago, in Dorothy bungalow, where Madam Dorothy Fernandez kills her husband, his lover and the driver.
The story shifts to the present day, where Thomas Kutty (Ashokan) buys the bungalow in Ooty with the cash which he received in 2 Harihar Nagar, with the intent of converting it into a resort. The property is believed to be haunted by the ghost of the mistress who was killed 70 years before. Thomas Kutty proves to his friends that these ghosts can be easily made by men, by keeping some men and women and disturbing Mahadevan and Govindan Kutty in their sleep. He also tells them that he had stayed there many days before he bought the bungalow, all alone. The three agree to stay with Thomas Kutty in the bungalow and bring their wives along.
In the middle of the journey they see Father Dominic, who warns that the foursome are in the path of bad things. They do not pay heed to his words, but then the housekeepers employed by Thomas Kutty leave on the pretext of the house being haunted. At this point Thomas Kutty reveals that he had lied to the others about having stayed alone in the days before purchasing the bungalow. This revelation startles the four, who start fearing for their own and their wives' safety. After a series of unpleasant events, the four decide to apologise to Father Dominic and ask him for help.
Fr. Dominic accompanies the four to the house and attempts to exorcise the house. But things sour on their first meeting, when Dominic mentions he is in no way associated to any church and he is a person involved in paranormal activities. However, before the 2 leaves his house, he warns of a threat from fire to one of their spouse. This turns true, the same night, when Thomas kutty's wife's dress catches fire, but she is rescued in the nick of time, and to a doctor sent by Father Dominic.
Post this incident, the priest visit's the house, after his earlier advice to stay away from alcohol, meat and women is not followed by the friends, leaving Father Dominic injured in the left hand by an unknown force. Here things takes a bad turn, when the maid servant is seen possessed by the ghost. While exorcising the ghost, Father Dominic suffers a heart attack, and is declared dead. Thomas kutty sells the house to Dorothy for half the price.
On their return journey, Mahadevan receives a call from Father Dominic, who says he faked his death. The Father reveals the doctor is his partner, the maid who was possessed was actually one of his minions, who had a twin sister. However Mahadevan reveals that he realised Father Dominic was a fraud, when after his first encounter with the ghost in their house, Dominic accidentally bandaged his right hand instead of his left. Similarly Appukuttan reveals he knew the doctor had lied about his death, as he had checked his pulse. Govindan reveals they bribed the registar with double the amount and he had revealed that Dorothy and Father Dominic are the same people. And as a final coup de grace, Thomas kutty reveals they have the property and the amount he has the full amount he paid to Dorothy/Dominic for purchasing the property. The friends rejoice and head for Dorothy Bungalow.Mukesh as Mahadevan
Siddique as Govindan Kutty
Jagadish as Appukuttan
Ashokan as Thomas Kutty
Radhika as Marathakam/Ghost of Grace
Nedumudi Venu as Father Dominic
Rohini as Sulochana (Mahadevan's Wife)
Lena as Parvathy (Govindan Kutty's Wife)
Reena Basheer as Janaki (Appukuttan's Wife)
Rakhi as Jessy (Thomas Kutty's Wife)
Thampi Antony as Doctor
Rajesh Hebbar as Sekhar
Harisree Ashokan as Earnest
Kochu Preman as Thomas Kutty's relative
Karishma Kotak as Dorothy Fernandez
Anoop Chandran as Driver of Dorothy Fernandez
Lakshmi Rai ... Special Appearance
Kalabhavan Shajon as Driver
Pala Aravindan as Registrar
Shooting for the film began in early October 2009. It was scripted and directed by Lal, who also wrote and directed the film's prequels.
The films soundtrack contains 6 songs, all composed by Alex Paul. Lyrics by Bichu Thirumala, Anitha and Muthu Vijayam.
In Ghost House Inn received average to positive reviews, in contrast to its predecessor, which received mostly positive reviews. Rediff.com gave it 2 out of 5 stars, saying, "There's nothing new about In Ghost House Inn... this third instalment comes without much of a story line compared to the earlier films." Sify.com wrote, "In Ghost House Inn manages to entertain the viewers to some extent". Indiaglitz wrote, "All in all ‘In Ghost House Inn’ may find it little harder than its prequels to satisfy the ever demanding fans of the fantastic four." Similarly, Oneindia.com and Nowrunning.com gave average reviews to the film and gave it 2 out of 5 stars. But Zonekerala.com gave the film 4 out of 5 stars, saying, "The film has aptly made use of the resources available and is constructed at a modest budget. This movie is a must see for your family this season".
Though a sequel was planned,it was eventually dropped down.There were rumours that the 2015 film John honai was the 4th instalment in the series, but was confirmed to have a different plot.
In Ghost House Inn was a super hit in the box office.