Simhanandini, who becomes infatuated with Krishna Kumar, attempts to seduce him, but he rejects her. Humiliated, she accuses him of deception. To settle the matter, Krishna Kumar proposes a dance competition between Hema and Simhanandini, which Hema wins. They then request to witness the diamond’s effect on Karthika Pournami, and Sri Krishnadevaraya grants their wish. During the event, the diamond radiates seven colours in the moonlight.

Seeking revenge for her humiliation, Simhanandini conspires with Senadhipathi (commander) to frame Krishna Kumar for the diamond’s theft.