Later just in front of the Poovathil Muttu, a temple was built with the yards surrounding the sanctum sanctorium and the idol with 4 sacred hands was installed with all the religious observances. This temple is very popular as Arathil Bhadrapuram today and dominates over the place in all its magnificence.

Overjoyed by the obedience of his newfound allied the Raja gave 5 desoms to the 237 Brahmin families that had accompanied him from Gokarnam. The 5 desoms were 1) Arathil 2) Cheruthazham, 3) Kannur, 4)Kulappuram and 5)Vara ruchi mangalam. The Raja also built 3 temples for all the 5 desoms. They were Arathil , Bhadrapuram, Udaya puram and Krishna puram and he built another general temple, Sree Raghavapuram Hanuman Temple for all the 5 desoms to congregate at their wish.

It is widely believed that Pazhassi Bhagavathi is none other than SreeKrishna Bhagavan's mother Devaky's eighth child who vanished in the firmament warning Kamsan who was about to kill her eighth child saying "Kamsan, your nemesis has been born on earth already". Later upon the instruction of Bhagavan Siva she takes up a new incarnation and appears at the place called Pazhassi and becomes popular to her devotees as Pazhassi Bhagavathi, the formidable and fearsome deity who is awe-inspiring to all her followers by her sheer powers. It is said that she came to Payyavor Shiva Temple premises in search of Lord Shiva and found her abode adjacent to the Temple. Because of her fiery powers, it is believed that Lord Shiva locked her up in fetters till the Payyavoor festival was over. That is the reason why the Pazhassi Bhagavathi Thira is conducted only after the Payyavoor festival. Setting out for further journey, it is said Pazhassi Bhagavathi elicited the obeisance of innumerable families and temples to ultimately settle down as subservient to Arathil Bhagagavathi.