He was 78. Varma started his acting career as a stage artist and eventually made his Bollywood debut with a supporting role in Yash Chopra's 'Dharmputra' in 1961, which did not do well.
He shot to fame with his performance in 1975 film 'Chori Mera Kaam', which bagged him his first Filmfare Award for Best Comedian.
Varma went on to star in memorable films like 'Chor Ke Ghar Chor', Sanjeev Kapoor-starrer 'Angoor', 'Gol Maal', 'Khatta Meetha', 'Naastik', 'Rang Birangi', 'Dil', 'Judaai', 'Andaz Apna Apna' and 'Dil Toh Pagal Hai'.
He also acted in Marathi and Bhojpuri films. Known as a man of principles, he had consistently refused to act in roles that demanded poking fun on handicapped and physically compromised people, earning respect in the film industry.
He retired from films after working in 'Mere Yaar Ki Shaadi Hai' and 'Calcutta Mail'.