The Village by the Sea is set in a small village called Thul, which is 14 kilometres from Bombay. Lila, the eldest child among four siblings, is thirteen years old, yet she already has the maturity of an adult.

Her brother Hari, twelve, is the only person with whom she can share her troubles. Their mother is ill and needs constant care and nursing. Nobody knows exactly what she suffers from but she grows weaker and weaker with each passing day.
Their father, who has been out of work for months, is in a permanent drunken stupor, from which he arises occasionally to shout at his family.

Women pray to a rock for the safety of the fishermen.

With two younger sisters to take care of as well as their mother, life for Lila and Hari is not easy. Their father is not very useful as he is often away at the local toddy shop, getting drunk.

There is a constant need for money as the family is almost always in debt. Then one day, Hari decides he has had just about enough and leaves for Bombay– the Bombay where dreams come true and ambition yields.

Lila is left alone to manage her sisters Bela and Kamal, as well as her mother, and somehow keep the family strings together. Help comes from an unexpected source, the rich DeSilva's. Meanwhile, Hari is new in the great city of Bombay, and all alone.

A kind restaurant proprietor, Jagu, takes pity on him and welcomes him to work in his restaurant, Sri Krishna Eating House. There, Hari builds a strong friendship with Mr. Panwallah, the lovable watch repairer whose shop is just beside Jagu’s.