According to the tales in Brahma legend, Aashutosh Bhagwan Shankar appeared with Parvati on his visit to this magical place. Mesmerized by the splendour of this place, Bhagwan Shankar and Mata Parvati, vowed to live and practice the meditation here for 11 thousand years. Once, a jewel of Mata Parvati lost in the other world when it fell down in the water while she was playing in the water. Bhagwan Shiva ordered his ‘Gana’ (angels) to find out the lost jewel (Mani) of Mata. When all failed to find out the lost mani, Bhagwan Shankar became furious and opened his third eye. Entire earth shook with all her creations. All the gods were terrified.
Naina Bhagwati proclaimed it from the third eye of God Shankar, about the lost ‘mani’ of Parvati to Patadhipati and ‘Sheshnaag’, the god of all the jewels. Sheshnag blew a forceful breath, originating a hot water fountain at that place. Along with the lost ‘mani’ of Mata Parvati, there came out many jewels out of this new fountain. Parvati took her own jewel (mani) and turned the other jewels into stones with her curse. Fury of Bhagwan Shankar was calmed. This tale named the place as Manikaran. In legend, this shrine is described as ‘half-woman area’ (Ardh-Narishwar) due to the meditation dwelling of both Bhagwan Shankar and Mata Parvati. This pious place became so dear to Shankar Ji that he renamed this place as ‘Kashi’.
According to the Sikhs, during third Udasi, the founder of Sikhism Guru Nanak came to this place in 15 Asu 1574 Bikrami with his disciple Bhai Mardana. Mardana felt hungry and they had no food. Guru Nanak sent Mardana to collect food for the langar (the Community Kitchen). Many people donated atta (flour) to make Roti (bread). The one problem was that there was no fire to cook the food. Guru Nanak asked Mardana to lift a stone and he complied and a hot spring appeared. As directed by Guru Nanak, Mardana put the rolled chapatis in the spring to his despair the chapatis sank. Guru Nanak then told him to pray to God saying that if his chapatis float back then he would donate one chapati in His name. When he prayed all the chapatis started floating duly baked. Guru Nanak said that anyone who donates in the name of God, his drowned items float back.