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Concerned purāṇas are generally interested in giving the detailed lists of Nanda and Maurya dynasties. Passing references of Caṇakya are found in them. The Katha is in real sense the first source documenting legendary history of Caṇakya. The story in the Katha (1.5.114) can be summarized in the following manner -
In Patalipura, Nandas were ruling. The last among them was Yogananda. (A short story is given why he was called 'Yogananda'.) Śakaṭāla was his minister. For some reason, Śakaṭāla wanted to take revenge on Yogananda. (The details are given inbetween the story.) On one occasion, he saw a brahmin named Cāṇakya who was digging kusa grass upto its root because the grass pricked the sole of his foot. Sakaṭāla thought that he was a proper person to retaliate Yogananda. He invited Cāṇakya in the palace of Nanda for śrāddhabhojana. Cāṇakya occupied the seat of honour (agrāsana). The seat was actually reserved for a brahmin called Subandhu. Śakaṭāla reported the situation to Nanda. Nanda told Śakaṭāla that Subandhu will adorn the seat and none other. Sakaṭāla reported this message to Caṇakya and requested to vacate the seat. Due to this insult, Caṇakya became furious. He abruptly loosened his tied tuft of hair and exclaimed, 'Within seven days I will destroy Nanda and then only I will tie down my tuft of hair.'
Nanda was overpowered by anger. Without giving him a chance to take any action, Cāṇakya ran away. Śakaṭāla, as if waiting for this opportunity, gave shelter to Caṇakya in his house. Śakaṭāla made all the arrangements for Caṇakya's practice of black-magic (kṛtyā-sādhanā). The black-magic started showing it's effects on Nanda by creating inflammatory fever. Within seven days Nanda died.