Lanka Was Situated on Mountain Trikut and was a very beautiful Place. It is popularly believed that this place has been designed and conceptualized by Lord Vishwakarma on the order of Lord Shiva. It was made up entirely of Gold.
As per popular belief, one day Lord Shiva and Parvati went to meet Lord Vishnu and Laxmi at their place. Vishnu and Shiva sat together to discuss the problems of Nature. While Parvati and Laxmi sat together. Laxmi ji took parvati to show her entire thing there in Vishnulok, its beautifulness, lavishness etc. Seeing this Parvati ji got astonished.
After returning home, Parvati became saddened and she started living dejected. Seeing this one day, Lord Shiv asked her about sadness. Then she told him her desire to have a lavish house and prosperous lifestyle. Shiva tried to convince her that these are all illusions and will bring no good to the life but she insisted and then Shiva have to order Vishwakarma to find a place and make a special palace which no one has ever built.
Lord Vishwakarma then made that palace on the Trikut Parvat and also made city around that entirely with gold. It was a beautiful palace of gold with all the amenities, lavishness. This was the the best palace on the earth.
Raavan was called upon to do the proceedings of Puja of Griha Pravesh with Lord Shiva and Parvati. After Puja, Raavan was asked for Dakshina, i.e. ask for whatever you want. At that time, he asked for that Palace and city itself and then Lord Shiva has to give him that entire palace and City to Raavan.
Seeing all these Parvati got hurt and she cursed on Lanka that one day it will catch fire and whole of it will be destroyed.