I am sorry to hear this. You supervisor is not God and he does not control the universe. Even if you do not believe in God, he/she is a just a person. You do not need to apply at the same institution. But if you want to go to the same institution, just apply.
Just for curiosity, is you supervisor a woman? It has occurred to me that the worst manager/employee supervisor/student relationships are woman/woman. It turns often to personal which is a double-edged sword.