With two cows and four mouths to feed, Nareshan can barely make ends meet selling milk to the inhabitants of Karuthupuzha. That is, until his daughter, Sarasu, is possessed by the demon-god, Chaathan. Now, the faithful from all over Karuthupuzha and beyond visit Nareshan with money and gifts to receive Chaathan’s blessings. The sceptics of the town, meanwhile, believe that Nareshan is fooling everyone to make money. However, when one of the leading sceptics in town, Dasappan, member of the Communist Party, rationalist and atheist, loses his mind after loudly proclaiming that Chaathan is a farce, the people’s belief in a divine power residing in Sarasu is reinforced.With the number of faithful only growing as each day passes, Nareshan realizes that his daughter’s possession might be the best thing to have happened to him. When the rich widow Ponnamma comes to his house to seek help from Chaathan for her son, Nanu, the fate of Nareshan and his family is set to change forever.

In The Oracle of Karuthupuzha, Manu Bhattathiri revisits the town of Karuthupuzha that was immortalized in The Town That Laughed and Savithri’s Special Room and Other Stories.