- Sri Chala Bhagavathi Temple is one of the one hundred and eight Durgalayas installed by Sri Parasurama Maharshi.
- A shala was built for the purpose of performing the yagam in the east of the present day Kannur, which was known as Kanvannur because it was the place where Sri Kanva Maharshi had done penance.
- Historically, this place became Shala and then Chala.
- The temple was earlier known as Puzhavayal Bhagavathi temple. Sathya Pareshanam (acts of finding out truth) of Kolathiri kingdom was held in the temple. In ancient times,
- The temple was managed by Randu Thara Nambiars who were known as Achanmar.
- The temple belonged to the Nambiar families of Ayiliyathu, Palliyathu, Arayathu and Kandothu.
- The legend says that Parasurama was once fighting a demon named Danavendra, and he needed the help of Goddess Bhagavathy to defeat him.
- After the battle, Parasurama installed the idol of the goddess in Chala to express his gratitude.