In January 1977, nine months after delivering his venerated dissent in the ADM Jabalpur v. Shiv Kant Shukla (Habeas Corpus) case, Khanna was superseded to the office of the Chief Justice of India by Justice M. H. Beg, contrary to the convention of appointing the senior-most puisne judge as the next Chief Justice of India on the superannuation of the incumbent, at the behest of the then Prime Minister of India Indira Gandhi, despite him being the senior-most puisne judge in the Supreme Court at the time of superannuation of A. N. Ray, the incumbent Chief Justice of India. As a result of this, he promptly resigned from the court which was effected in March.