There was a lot of commotion over the song "Choli Ke Peeche" because of the first couple of lines. Then the song was banned from the movie, cassettes, and CDs. Later on, it was brought back because the song was so popular, and it wasn't meant to be sexual.
Alka Yagnik and Ila Arun shared Flimfare Best Playback Singer award for the song "Choli Ke Peechhe". This was the only time when two playback singers shared an award in the history of Bollywood awards.
Subhash Ghai as director, this was his last film with Laxmikant-Pyarelal,an about 15 years association. As an producer the last film with them was Trimurti. Also he sold the music rights of Khal-Nayak to Tips instead to his regular HMV.
Subhash Ghai was making Devaa with Amitabh Bachchan which was shelved. It was said that Devaa was made as Khal-Nayak, with a new starcast, new a tittle and some script changes. Amitabh Bachchan, his role, was played by Sanjay Dutt, which was the second film with Subhash Ghai, the first was Vidhaata. The were also to work in Hero but then a newcomer, Dev Anand's discovery, Jackie Shroff did the role.
When Khal-Nayak was in the making, filmaker, then Sawan Kumar had started a different film with the similar tittle, Khal-Naaikaa.The two films, although their stories were different, both filmakers were in the race to complete their films, there was a big controversy about these 2 films in those days.
Sanjay dutt dubbed for this film after coming out of the jail, this was the first film Sanjay Dutt dubbed after coming out of jail. Incidently in the last scene of this film it shows Sanjay Dutt going to jail.
This film had many conterversies, Sawan Kumar's film had similar tittle with this film, then the choli ke peeche song and also Sanjay Dutt's arrest. In this film, Subhash Ghai had to face many problems then his other films.
After the blockbuster Saudagar, then Subhash Ghai made Khal-Nayak, after Khal-Nayak, then Subhash Ghai as director, took a break and then produced Trimurti with Mukul Anand as director. Subhash Ghai returned to direction after 4 years with Pardes.