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According to legend, the present piece of land, where the holy temple is located, was lying fallow before. Late Sri Hansa Panda, who happens to be the Purohit of the then King of Kanika, used to graze cattle’s and sheep’s in the land. One day Sri Panda was feeling tired and took rest on a heap of dry mud present there. While taking rest, he experienced a strange unusual feeling within himself. Surprisingly on the same night, The Goddess "Chandika" appeared in his dream and requested him to take her out of the land.

There after he went to the King and told everything about the strange experience he had that night. With the help of the king, Late Hansa Panda dug up the same piece of land. It is being said that around forty numbers bullock carts of Red Sindoor came out while digging and then emerged The Deity of Maa Katak Chandi. Then the temple was built on the same land. Here in Cuttack, the residents strongly believe Maa Katak Chandi as The Living Goddess. The temple of Maa Katak Chandi, the presiding deity of the city is visited by hundreds of devotees every day. The image of the deity is older than the temple. It is believed that she was the family deity of Gajapati Empire in the medieval age, due to Islamic invaders' attacks she was buried while the kings migrated to Puri.