It is believed that Parashurama who was living in Sahyadri, killed the Kshathriyas who were cruel and donated the lands to Kashyapa. He prayed to Lord Shiva for a place to live. Lord Shiva assured Parashurama that if he performed a penance at Kadali Kshethra, Lord Shiva would reincarnate as Manjunatha for the betterment of the world. As per Shiva's orders Parashurama threw his axe into the sea and created a place for his penance. Yielding to Parashurama's prayers Lord Shiva appeared to him as Manjunatha with Goddess Parvathi and stayed at Kadri for the betterment of the world. As per the orders of Manjunatha the Sapthakoti Manthras become the seven Theerthas.