After the passing of my supervisor, the department forces me to start again from zero. How to respond? I have had a very rocky PhD candidacy. My first supervisor left academia half way through my candidacy; the replacing supervisor passed away a year after that. So two and a half years through a three-years PhD candidacy, the head of the department gives me two choices: Either I have to change my topic of research and start over from zero again and somehow finish "in time" (how this will be done is unclear, and I am supposed to hash it out myself with one of the available supervisors), or I have to withdraw from the program. 

Their justification is that no one in the department understands the content of my works. Is this a proper/normal justification? I cannot believe that an academic department belonging to a top university can seriously use “we fail to understand the candidate’s work“ as a justification to force me to do something that I deem to be completely infeasible.

So, assuming I cannot dispute this decision, given the fact that I have to start over from zero again anyway, with a department that readily admits that its people do not have the competence to understand and therefore will throw away wantonly what I have produced after two and a half years of working nine hours every single day without a single day off, should I just leave and apply for another PhD program? Whatever that will be coming out from this attempt to salvage my PhD will probably lead me nowhere except a piece of paper anyway. If I withdraw for this reason, how will this be seen by other universities? How will this be seen by people in the industry? 

My goal is a career in academia. I am someone who has severe social anxiety and so I find it impossible to survive in the industry. I have always thought I might have a chance to be accepted in the academic world instead, but I have now realized that someone like me probably belongs nowhere.
Maybe someone else in the department can supervise your work and maybe they can't--the fact is that they won't, and that's what you have to work with. My (pessimistic) gut feeling is that the department head has essentially written you off as collateral damage. He's willing to push you through for a completion because that's good for the department, but he doesn't care that you want an academic career. 

On the off chance that this isn't the case, you might try approaching the possible available supervisors and get a clear timeline from them about how you can finish with work that can launch an academic career. If they tell you it will take longer than the one year that the department head seems willing to allow, you can try going over his head to pressure him to agree to your new supervisor's timeline. But this is a rather delicate situation and you are probably better off shopping your work around at another school and explaining that you lost two supervisors through no fault of your own.