The sastra karaya could see a ghost standing behind Shehan Karunatilaka’s shoulder. He said the spirit was a woman, someone Karunatilaka had known and who was now his guardian. Now, in his airy living room in Colombo, Karunatilaka admits he didn’t sense anything himself, and that he was a little bit disappointed with the experience. “There is the sceptic in me that thinks he [the astrologer] was just doing some cold reading,” he admits, but when advised to do a Bodhi pooja, Karunatilaka lit some lamps and made offerings of flowers under the sacred fig tree anyway.

Karunatilaka never attempted to become better acquainted with his ghost. One of Sri Lanka’s most celebrated contemporary writers, you wouldn’t imagine Karunatilaka’s wry intellect lends itself to a belief in the paranormal. But while he’s not a man of (any) faith, his thinking on the matter is simple – “I am not a believer in this stuff, but I fear it. If it is out there, you don’t want to be messing with it.”

Yet an astrologer’s office is far from the strangest place he has been in pursuit of material. In the last few years, the author has taken an interest in subjects as diverse as Sri Lankan death squads, Colombo’s haunted houses, the pilgrimage to the sacred city of Kataragama and Buddhist notions of the afterlife and rebirth.

In fact, the last time I met Karunatilaka, he was lurking among the graves in Borella cemetery, scouting for ghosts. Then his sunglasses, pierced nose and sharp beard, threaded with white streaks, gave him the air of an insouciant rock star. It is an air he retains, perhaps because even though his band Powercut Circus no longer exists, Karunatilaka still plays the bass guitar every other morning, treating it as a form of meditation.

While the music remains a constant, Karunatilaka’s other interests shift with each new novel. With Chinaman: The Legend of Pradeep Mathew, it was cricket games and old, alcoholic uncles. Certainly, his friendly ghost brought him good fortune back then – the book he had self-published in Sri Lanka first won the Gratiaen Prize, then gathered up the Commonwealth Book Prize and the DSC Prize for South Asian Literature even as it found publishers in India, the US and the UK.

And now, a new novel

That was in 2012, but Karunatilaka is finally ready to unveil his follow-up. In his home office, he has walls covered in post it notes and newspaper cuttings, wireless neon lighting he controls from his smartphone and several writing projects in various stages of progress. His present focus is the unpublished manuscript Devil Dance, which is currently in the running for the Gratiaen Prize. Founded by Michael Ondaatje with his Booker Prize winnings in 1992 and named for Ondaatje’s mother, the Gratiaen is one of Sri Lanka’s best known literary awards. Karunatilaka has won twice before, and will only find out if he has won again on May 12. In any case, Devil Dance should be in bookstores by the end of this year.

Karunatilaka writes for a Sri Lankan audience and is canny enough to know that it’s that very specificity that makes him interesting to the wider world. When we first meet Devil Dance’s protagonist, the intrepid investigative journalist Riyal Ratnam Almeida, he is already dead; tethered to his own corpse, even as it is being inefficiently disposed off in Beira Lake. Born in 1955, dead by 1990, Riyal’s obituaries will describe him as “a brilliant, erratic, homosexual leftist,” and “Sri Lanka’s premiere war photographer.” He has lived through some of the most tumultuous years in Sri Lankan history, and is about to be a spectral spectator to a few more.

But first, some background

Post-independence Sri Lanka has been wracked by violence. The war between the state and the separatist terrorist outfit Liberation Tigers of Tamil Eelam (LTTE) stretched out over nearly three decades, and was brought to a bloody end under former President Mahinda Rajapaksa only in 2009. Meanwhile, the Indian Peace Keeping Force, which was deployed following the Indo-Sri Lankan Accord of 1987, is remembered with little fondness by Sri Lankans.

But lesser known outside these shores are the insurgencies in the south of the island. The party Janathā Vimukthi Peramuṇa led armed uprisings against the ruling governments in 1971 and then again in 1987. Young, poorly armed and barely trained though they may have been, the JVP earned a reputation for pure brutality, one that would only be outdone by the state’s response. Thousands upon thousands died.

“It was the perfect storm,” says Karunatilaka now. “And all this stuff happened between the third A-ha album and the fifth A-ha album.” However, while the novel relies on this context, he did not delve deep into the historical record, but he has his premise: “If a ghost is someone who died unfairly, Sri Lanka is obviously swarming with them.”

In Riyal, Karunatilaka created an angry ghost, hungry for justice. The dead journalist suspects he was put on a hit list thanks to his determined attempts to ferret out the killers of a certain Elsa Loganathan. The young woman’s corpse was found floating in a tank on the roof of the Hotel Rio. Unfortunately, even surviving his own death has left Riyal no wiser about who murdered Elsa.

Was it the LTTE or the India’s intelligence agency RAW or a Sri Lankan state-sanctioned death squad? What role does the suspicious US Fund for Peace play? As Riyal sets out to unravel the mystery, he is also simultaneously working up an ethereal sweat, struggling to master the skills that will allow him to visit pain and havoc on the men responsible.

Yesterday, today, and maybe tomorrow

The story plays out in a world that is completely contemporary in its concerns yet populated by creatures out of folktales, Buddhist philosophy and Sri Lankan legend. Grease Yakas go diving in the wrecks with mermaids and “tsunami drowners”, the Crowman in his office serves up justice on cheating husbands with a little help from the other side, and hordes of the disappeared dead ride the winds as they await their killers in the afterlife.

While this shadow world exerts a powerful influence on our own, the horrors who inhabit it pale in comparison to those which living men make – the torture rooms hidden in the middle of a bustling city, the mass graves packed with the bones of entire villages.

This is undoubtedly grim raw material, but Karunatilaka finds a very Sri Lankan way of approaching it. In his writing, irreverence and humour leaven despair. (The general attitude seems to be, there may be bombs in the street and mass graves in the forest, but life goes on, so why not face it with a glass of arrack in hand?) And if this plot sounds like he has many balls in the air, it’s because Karunatilaka has never juggled so hard before.

Like his famously hard drinking predecessor, the perpetually inebriated 64-year-old WG Karunasena who was the star of Chinaman, Riyal is also a determined journalist with a strong appetite for self-destruction. But where Chinaman appealed in part because of the intimacy of its plot, and the deep familiarity and affection its lead evoked in readers, Karunatilaka is at work on a much larger canvas with Devil’s Dance. He was taken by surprise to have Chinaman hailed as the ‘great Sri Lankan novel,’ and in that success lie the seeds of his present doubt – “perhaps, it is when you try to write the ‘great Sri Lankan novel’ that you are most likely to fail,” he says.

That this career in writing fiction brings with it no surety of success is not a surprise to him. Consequently, he is yet to take fully to it as a profession, still committing some of his time to advertising work. The latter has paid his bills for a long time – arrived at after trialling life working at food courts, in data entry, and perhaps most memorably, digging graves – it is a job that he is decidedly good at and he has the awards to prove it.

But once he has earned his keep, he settles back into Sri Lanka and the house he grew up in. He has made a routine out of discipline – rising at 4am to write a bit every day, and spending his afternoons in charge of his young daughter. He says becoming a father has somehow made him a more prolific: “You become more aware of the scarcity of time and the need to fill pages.”

It helps that being in the land of his birth is also the best antidote to this writer’s doubt. It inspires a kind of certainty – certainly, it is the only place he could have produced Devil Dance. His voice, his stories, even his sense of humour, are somehow inextricably of this place. He admits sometimes to struggling with writing in the gloom of London, or in relentless Singapore.

“When I am here, in Sri Lanka, it’s just not an issue. I can’t imagine writing anywhere else,” he says. It is an approach that has served him well. By just staying home, Shehan Karunatilaka has found, again and again, stories the world wants to read.