Manali SDM Vinay Dhiman said that there was no intimation from the promoters of the power project regarding the testing of the reservoir.
He said that a departmental enquiry would be conducted to ascertain the cause of collapse of the dam.
Company officials were unavailable for comment. The incident sparked panic among locals, especially in Pirni-- the "adopted" village of former prime minister Atal Bihari Vajpayee.
Locals claimed that had the water flown towards the Aleo Bridge, localities downstream would have been washed away, including the nearby labour camp, resulting in huge casualties.
The reservoir with 12,000 cubic meter capacity was filled for the first time since its construction and was being tested since yesterday.