Atlantic, £17.99, 419pp. £16.19 from the Independent Bookshop: 08430 600 030

Last Man in Tower, By Aravind Adiga

Aravind Adiga's vibrant third novel has the simple urgency of a thriller populated by a garrulous and opinionated throng of neighbours: the residents of Tower A of the Vishram Co-operative Housing Society, located in a promising spot between illegal slums and Mumbai's airport. When a local developer makes a wildly exciting collective offer to the members, he generates a frenzy of aspiration, greed and self-interest. On the table is a sum of rupees that is roughly 250 per cent of each apartment's market value – but acceptance must be unanimous. The three-month deadline for signing quickly switches from a distant formality to a looming threat as the residents realise that they are not of one mind: retired teacher Masterji has no inclination to sell.

Inhabiting Adiga's simple but compelling plot are Vishram's residents, whose backgrounds, preoccupations and increasingly open bickering give the novel plenty of colour and pungency. Quietly regarded as dipping into the Society's funds, Kothari is the long-standing secretary, derided as a "nothing" man for his low rates and equally meagre repairs to the building. Ibrahim's child-like personality has never suited his business of running an internet café, while Ramesh Ajwani has never hit the big time as one of Mumbai's real-estate brokers perhaps because of a lack of the killer instinct.

Social worker Mrs Rego, tartly known as "Communist Aunty", works in the poorer districts of Mumbai after her husband absconded with a younger lover with all her family wealth. Mrs Puri is the busiest figure, looking after her 18-year-old son whose Down's syndrome needs define her daily routine.

At the heart of the community is Masterji. "Controlling appetites and sorrows," with his beloved wife recently passed away and surviving son migrated to the inner city, Masterji "had accepted his lot with dignity, and this elevated his standing amongst his neighbours, who had all, in one way or another... been blighted by fate." And there's the rub; the developer's offer unleashes wild speculation, but also unlocks a repressed sense of entitlement – that the tabled cash is in some way a just recompense for lives of disappointment or harsh conditions (though none so harsh as those of the Society's cleaner, whose scrupulous honesty and vulnerable slum-dwelling existence offers a foil to the middle-class residents' baser instincts).

Adiga manages this stand-off well. Clumsy attempts to coerce Masterji to sign increase his intransigence, based on a principled refusal to be bullied but also bolstered by private guilt associated with the memory of his wife. Adiga's genius is in making the developer's offer so extreme; at about 400 times the average Indian income, it is future ease on a plate, which seeming generosity casts Masterji's resistance in a perverse light. Adiga exploits this tension in an increasingly hostile atmosphere. The residents' amateurish conspiracies are unconscionable but Masterji's indignation bears a whiff of selfishness, which allows an intriguing ambivalence in the reader's loyalties.

There's a darkly comic streak to the neighbours' avaricious machinations. This recalls the gleeful vengeance of Balram, whose rise from wily son of a rural rickshaw-puller to outlaw entrepreneur in Bangalore's boom won the Man Booker Prize for Adiga's debut, The White Tiger. The righteous energy of the underdog galvanises Adiga's fiction, from the injustice and corruption that framed Balram's origins to the richly textured short stories of a fictional Goan town in his excellent Between the Assassinations. Underpinning Adiga's seemingly genial vignettes was the casual brutality of indigent life, which boiled into outrage against the suffocating injustice of poverty and discrimination.

Last Man in Tower is less starkly political in tone. When Masterji decides he is fighting for an unspecified underclass rather than against a developer, his reasoning has less heft than the grinding labours of Adiga's previous outraged casts.

The pace of this novel is a return to the fiery attack of The White Tiger, while the portmanteau characters draw on the varied social stock of Between the Assassinations. The blend is rich and smooth. Scrupulous avoidance of stereotype adds depth, and Adiga's delicious prose (plump, sandaled toes suggesting "bonsai cleavage") ensures that his latest offering delivers a provocative plot with mischievous eloquence.

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