Dharmasthala was known as Kuduma in Mallarmadi, a village in Belthangady has a history of 800 years. A Jain Bunt chieftain Birmanna Pergade and his wife Ammu Ballalthi used to live in a house called Nelliadi Beedu. According to the legend, the guardian angels of Dharma who were in search for a place where Dharma was practised arrived at assumed Pergade's abode. The couple welcomed the visitors with great respect, impressed with there generosity the Dharma Daivas appeared in the dream of Pergade and explained the purpose of there arrival. Pergade knowing the reason vacated his house for the worship of the Daivas and dedicate his life to the propagation of Dharma. He used to worship them daily. The Dharma Daivas appeared again and told him to build shrines for four Daivas Kalarahu, Kalarkayi, Kumaraswamy and Kanyakumari. A Brahmin priests is appointed to perform the rituals in the shrines. In return, the Daivas promised Pergade to protect his family. The priests requested Pergade to install a Shivalinga beside the native Daivas. The Daivas then sent their vassal Annappa Swamy to procure the linga of Shiva from Kadri Manjunath Temple, near Mangalore. Subsequently, the Manjunatha temple was built around the linga.