The New Delhi-based author will get Rs 1 lakh and a citation which will be presented by author/television journalist Sagarika Ghose at the British Council in the capital on December 14.
The short-listed titles were Arzee the Dwarf, Chandrahas Choudhury (HarperCollins); Hotel at the End of the World, Parismita Singh (Penguin); Eunuch Park, Palash Krishna Mehrotra (Penguin); Baulsphere, Mimlu Sen (Random House); and Atlas of Impossible Longing, Anuradha Roy (Picador).
The 2009 judges' panel comprised novelist Rana Dasgupta, journalist Mukund Padmanabhan and writer Arshia Sattar.
In 2008, Pakistani author Mohammed Hanif's A Case of Exploding Mangoes won the award.
The Shakti Bhatt Foundation is a non-profit trust set up by the late writer/editor's family to keep her memory alive.