You are liable to pay the bank loan EMI if builder fails to do so 

2) you have to sue builder to recover EMI paid by you till possession

3) male both the old and new builders party to legal proceedings  

Bank can seek to auction flat  for failure to repay loan 

DRT proceedings would not be stopped 

Ans: Bank will take symbolic possession of the property offered as mortgaged. On the next date of the hearing the bank will request the DRT to also allow for an order of physical possession if you say you are unable to pay any EMI. Following which the bank will auction the property and take the necessary sale proceeds. 

If you have been summoned by DRT court to appear before them, then it becomes your duty to appear before the said legal forum,  either in person or through your lawyer,  file vakalatnama,  express your objections to the case filed against you,  seek time for filing detailed counter objections. 

You may discuss with your advocate and proceed as suggested. 

If you have decided to forego the property you have proposed to purchase you may allow the bank to take possession of the same. 

Since you have not paid any huge money towards the sale consideration,  you may not suffer heavy loss. 

Hence you can pass on suitable instructions to your lawyer who will file a memo before DRT  accordingly. 

If you want to fight against the case then you can decide about it and let know your advocate the details and instruct him to fight the case. 

They can take physical possession and evict you. Later they can auction the flat for recovery

Bank has absolute right to claim its amount lend to you. 

You can approach the DRT for amicable out of court settlement, IF bank agrees for the same, you can offer a lump sump amount for the remaining EMIs.  

You can either request for One Time Settlement and settle the matter once and for all or else keep on fighting the case till you can arrange funds. The DRT matters are based on documentary evidence and the bank have an upper hand in such cases but at the same time the banks want the money and not a win so constrain them to reach a settlement at low amount.

Were you guarantor in the Loan Agreement signed by the builder? If No, then you need to file affidavit in reply before DRT quoting the above status of yours with relevant documents to show that you were not liable to pay the loan amount.

It is advisable to seek injunction on the further proceedings to be initiated by the Bank to take physical possession of your flat for no default on your part. 

Did you get notice from bank for regularisation of your loan account ? if No then this also can be ground that you were never informed that such loan account was turning to an NPA. 

Did you receive notices u/s. 13(2), 13(4) of SARFAESI Act and Rule 8(1) of Security Enforcement Rules ? If No, then you raise technical default on part of bank non-serving the same to you.  

Did you sign an NOC in favor of the builder taking loan by mortgaging flat in which you stay ? If No, then this can be the strongest ground for not evacuating the same as you must have executed Sale Deed with the Builder, and its builder's duty to comply with the terms mentioned therein. 

Bank can proceed u/s. 14 of SARFAESI Act where the Bank can receive orders for evacuation of the flat on account of non-payment of loan and can take physical  possession of your flat. However, your affidavit in reply before DRT shall show that its your stake involved in the property, hence you should be rescued. 

Apart from filing reply in DRT proceedings, you are advised to file a Special Civil Suit for Specific Performance, Declaration and Permanent injunction against the Bank, the previous builder and the existing builder alleging all the misappropriation conducted by the builder and you rescuing your right over the property. Attach all the necessary documents including the agreement to pay EMI, Sale deed, the bank notices and the replies that you stated, the notice that you received from DRT, and your reply there, bank statement showing payment of EMI, Document disclosing date of possession when you occupied the flat, etc. 

1). Your first and immediate step is to file objection against the auction in DRT.

2). Simultaneously move application for stay against Auction in the High court.

3). File cheating complaint against the builder and other related people.

It is better you visit personally to discuss further on this matter, without my observation of the related documents no further advice can be given.