Haroun decides that he needs Witnesses to help him explain to the Walrus why his wish was necessary. Winding through the wild party, Haroun spots Iff dancing. Iff refuses to argue with the Walrus. Haroun, disappointed, heads for the second wedding party on the Lagoon. Mali is serenading an audience with another of his songs from Butt the Hoopoe's back, but pauses to tell Haroun that he can't help. Butt calls after Haroun that he can't help either since he's only a machine.
One might logically think that Butt would be the perfect witness for Haroun since he'd be able to give an account of what happened from a purely rational, emotionless point of view, but his refusal to do so because he's a machine is once again humorous, as his tone is more facetious than emotionlessly mechanical.
Haroun enters P2C2E House and watches the Eggheads moving about. He asks three Eggheads how to reach the Walrus' office. When he finally arrives at the door, he takes a breath and thinks that he finally got the interview he wanted, but not for the reason he thought, and knocks. The Walrus calls for him to come in. Upon entering, Haroun sees that the Walrus isn't alone. He's surrounded by King Chattergy, Prince Bolo, Princess Batcheat, Mudra, Blabbermouth, General Kitab, Iff, Mali, and Rashid, all smiling, and video monitors with the smiling faces of Goopy, Bagha, and Butt the Hoopoe. Haroun, perplexed, asks if he's in trouble or not, sending the entire room into a laughing fit.
P2C2E House appears cold and sterile, in look as well as in attitude, which lines up with its purpose in Gup of discovering very complicated and serious science. Haroun is approaching this meeting with a sense of doom. Remember that he originally wanted to meet with the Walrus to reconnect Rashid's water supply, but that opportunity was taken from him long ago. The reader experiences the wonder, dread, and bafflement of this turn of events alongside Haroun.
The Walrus explains that this is their "little yolk," sending the room back into laughter. When the laughter subsides, the Walrus rises and tells Haroun that to honor him for the service he's done for Kahani and the Ocean, he's granting him the right to ask for any favor he desires. Haroun, silent, looks unhappy, and he finally says that he can't ask for anything because what he wants is something nobody can give him. The Walrus tells a belligerent Haroun that he wants a happy ending after his adventure, but Haroun says that his happy ending can't be found.
Haroun's adventure on Kahani, as well as the adventure as told by this book, are both coming to a close, and Haroun's desire for a happy ending to this fits in with all of these journeys finishing. However, despite how much Haroun has embraced the absurdity of life on Kahani, he's still unwilling to trust that what happens on Kahani will be able to impact his life in Alfibay.
The Walrus sits and begins to explain that happy endings, both in stories and in life, are rare enough to be exceptions rather than rules, and because of their rarity, the Eggheads have learned how to synthesize them. Haroun protests that it's impossible to put happy endings in bottles, but seems uncertain. The Walrus notes that everything Haroun experienced has been quite impossible, and questions the wisdom of fussing over this impossible thing.
The Walrus's assertion about happy endings being rare encourages the reader to consider how stories end. It leads us to consider that not everyone in every story gets a happy ending—Khattam-Shud (an “ending” himself) certainly didn't. We're also again confronted with the storybook logic of Kahani, which doesn't necessarily follow the same logic as Alfibay.
Haroun then boldly wishes for a happy ending for his adventure, as well as a happy ending for his sad city. The Walrus points out that happy endings have to come at the end of something, or all they do is fix things for a while. Haroun says that that will do.
This passage indicates that while the story is nearing the end for the reader, it's not actually over for Haroun (who’s still very young, of course). The story may end on a happy note for the reader, but Haroun will have more struggles throughout his life—his story isn’t “khattam-shud” yet.
It is then time for Haroun and Rashid to go home. Haroun has particular trouble saying goodbye to Blabbermouth, who takes matters into her own hands and kisses Haroun, who is quite pleased. At the edge of the Lagoon, Haroun, Rashid, and Iff board Butt and wave goodbye to everyone else. It occurs to Haroun that Rashid surely missed his appointment in the Valley of K, but Butt assures them that time is on their side. Arriving at the Dull Lake, it is night. Butt lands next to an open window of the “Arabian Nights Plus One” houseboat. Haroun and Rashid climb in and fall asleep immediately.
Here we see another tie between Butt the Hoopoe and Mr. Butt when Butt insists that he'll get Haroun and Rashid back in time. Haroun and Rashid's movements throughout the novel have been made possible by these twin Butts essentially messing with time. While the molding of time certainly doesn't make logical sense, it draws on the unique logic of the story and the novel itself to become possible.
Haroun wakes to bright sunshine and finds Rashid sipping tea on a balcony, still in his nightshirt. He sees the swan boat coming at them across the lake, and Mr. Buttoo's yelling interrupts Rashid as Rashid begins to tell Haroun that he had a strange dream. Mr. Buttoo yells at Rashid that crowds are waiting and he can't be late.
Mr. Buttoo provides a rude awakening for Haroun and Rashid's return to Alfibay. Rashid's comment about a strange dream rouses Haroun's suspicions that potentially the dream wasn't just a dream, or that at least he and his father may have shared the same dream.
Haroun realizes that his adventure on Kahani took place in less than one night, and he thinks of the Walrus telling him not to make a fuss over it. Haroun hurriedly asks Rashid if he can remember his dream, but Rashid brushes him off, greets Mr. Buttoo, and tells Haroun to get dressed, ignoring Haroun's continued urgings to remember his dream.
Haroun is finally willing to trust in the power of the stories, particularly in regards to what the Walrus told him. However, Haroun is still unwilling to trust that Rashid experienced the same dream that he did.
Returning to his room, Haroun notices an envelope on his pillow. Inside is a note from Blabbermouth, signed by her and all his other friends from Kahani. One line in the letter says to come whenever and stay as long as he'd like, and Haroun notices that there is also a tiny Hoopoe bird in the envelope.
The letter moves Haroun's adventure on Kahani from merely a dream to something that truly happened. This renders Mr. Sengupta's question moot, as Haroun's story is proven true.
The narrator reminds the reader that Mr. Buttoo expected Rashid to win the people's support for him by telling happy, praising stories. Mr. Buttoo had decorated the park with happy decorations and pro-Buttoo political posters, but Haroun notices that the large crowd is mostly scowling. Mr. Buttoo snaps at Rashid that he's on, and to be good or else.
Mr. Buttoo is still expecting to censor and control what Rashid says. Mr. Buttoo is trying to tell his own story through his posters and his chosen decorations, but his story evidently isn't convincing his constituents that they should vote for him.
Rashid takes the stage as Haroun watches from the side. Haroun is shocked when Rashid addresses the audience and tells them that the story he's going to tell them is called "Haroun and the Sea of Stories." Rashid winks at Haroun, and proceeds to tell the story that the reader has just been told. The audience is hooked and even sings along with Rashid when he sings Mali's songs. When Rashid talks about Khattam-Shud, the audience stares at Mr. Buttoo and his henchmen, who look very unhappy. After the fall of the two Khattam-Shuds in the story, the audience starts chanting for Mr. Buttoo to go, and he slinks away. Mr. Buttoo is never again seen in the Valley of K. True to his promise, Mr. Butt is at the bus depot to take Rashid and Haroun home.
Here we see what the “point” of stories can be. Haroun's story becomes more than just something Haroun alone can learn from and apply to his life; through Rashid's retelling, the story has the power to enact positive change in the world by overthrowing Mr. Buttoo. Most notably, storytelling shifts power to the masses and robs Mr. Buttoo of his power to control them. Rashid essentially is borrowing what he learned from the Guppees and denying Mr. Buttoo's censorship, and the positive result is obvious.
When Haroun and Rashid arrive in the sad city, it's still pouring. Rashid happily suggests they walk home, making Haroun suspicious. They play in the downpour, and Haroun notices after a bit that the streets are full of people playing just as he and Rashid are. Haroun notes that the sadness factories are still producing sadness and everyone is still poor, but an old man yells at him to not sing those "tragedy songs" here. Haroun realizes that the happiness is the Walrus' doing, and he suddenly deflates. He tells Rashid that it's all fake, and that people should be happy when there's something to be happy about.
In this instance, the novel is considering how happy endings truly work within stories. Haroun's insistence that this happiness is fake points to the idea that stories live on after the last page; they only end for the reader. Haroun's story and life are just beginning, and he sees the happiness here as cheering things up for a while, as he previously discussed with the Walrus.
A policeman, floating by on an umbrella, interrupts and tells Haroun that there is something to be happy about—the city remembered its name, Kahani, which means "story."
The city's name meaning "story" brings both the ideas of naming and stories to a final conclusion, linking them together to bring happiness to the city.
Rashid is still overjoyed and Haroun is still in a dark mood as they turn onto their lane. Miss Oneeta comes onto her balcony to greet them and tells them that they're going to celebrate. She joins them in the street as Haroun demands what there is to celebrate, and Miss Oneeta lists her many good fortunes, including saying a final goodbye to Mr. Sengupta. When Haroun tells her that it's not all celebration for Rashid and him, Miss Oneeta suddenly becomes mysterious.
Miss Oneeta has experienced a transformative couple of days as well, and her happiness and confidence in her new life mirrors the confidence that Haroun has built up (even though it's not showing in this moment). Further, she's also vanquished her own Khattam-Shud by saying goodbye to Mr. Sengupta.
Soraya Khalifa opens the door to the apartment and Haroun and Rashid are frozen, staring at her. Soraya joins them in the rain and says that she made a mistake, but she's back now if they want her. Soraya continues and calls Mr. Sengupta sniveling, “mingy,” and weaselly, and says that he's done for. Haroun adds "khattam-shud." Rashid welcomes her home and they fall into a hug with Miss Oneeta.
The language used to describe Mr. Sengupta is the same as the language used to describe Khattam-Shud, further denoting that they're the same person. Also, there's a certain humor in having the real-life Khattam-Shud be "khattam-shud" and done with, again stressing the importance of wordplay.
When Haroun goes to bed that night, he holds the Hoopoe in his hand and tells it that with the way things are now, he doesn't need to go anywhere. Butt replies in a miniature voice, "but but but, no problem," and Haroun falls asleep. When he wakes he sees new clothes and a new clock. After a moment of confusion he remembers it's his birthday. He gets dressed and, looking at his clock, remarks that time is definitely moving again. In the living room, Soraya is singing.
All is well: Haroun was able to sort out his questions and problems in his dream, and no longer feels the need to rely on Butt and Kahani to provide a different angle on his problems. Now that Haroun has achieved balance in his life through his adventure on Kahani, saving Rashid's storytelling skills, and the return of Soraya (and her happiness), the clocks can move again and Haroun’s life can move forward.