Uninstall Django completely
I used the same method mentioned by @S-T after the pip uninstall command. And even after that the I got the message that Django was already installed. So i deleted the 'Django-1.7.6.egg-info' folder from '/usr/lib/python2.7/dist-packages' and then it worked for me.
I uninstalled django on my machine using pip uninstall Django. It says successfully uninstalled whereas when I see django version in python shell, it still gives the older version I installed.
To remove it from python path, I deleted the django folder under /usr/local/lib/python-2.7/dist-packages/.
However sudo pip search Django | more /^Django command still shows Django installed version. How do i completely remove it ?