According to another legend associated with Choti Diwali, there was a king of the nether world by the name of 'King Bali'. Though a demon, King Bali was very influential and his increasing powers posed a great threat to the Devatas of the heaven who went to Lord Vishnu asking for his help in eradicating King Bali.
To help Devatas and to curb King Bali's powers Lord Vishnu went to King Bali in the guise of a short-height 'Brahmin', who is known as incarnation of 'Batu Waman', and begged to give him only that much area of land that he could cover within three steps as King Bali was very much famous for his philanthropy.
When King Bali saw the small size of the Brahmin and heard about his request he just smiled and readily granted at the Brahmin's request. At this moment the Brahmin increased his size and covered entire heaven with his first step and the earth with his second step. He then asked King Bali where to keep his third step. King Bali offered his head to the Brahmin. With his third step Lord Vishnu covered King Bali's head and pushed him deep into the underground. But at the same time being impressed with King Bali's generosity Lord Vishnu granted King Bali the lamp of knowledge and allowed him to visit his kingdom once a year to light millions of lamps.
The day following the Amavasya is Kartik Shuddh Padwa. According to a famous legend, on this very day the very powerful King Bali comes out of the Patala Lok every year to rule over his kingdom on Bhulok, as per the boon awarded to him by Lord Vishnu. Since then this day came to be celebrated as Padwa in order to honor and welcome the King Bali. This day is also known by the name of "Bali Padyami" or "Bali Pratipada". The word "Pratiprada" literally means "below the opponent's foot".