See since registration done is by cheating file a case of cheating and breach of trust against the seller , file a police complaint. You have to recover the amount paid to seller by way of complaint and civil suit.  

If you get the nice from bank about the said property along with indemnity bond then only proceed else any legal heirs of that missing person may claim the same later

Fraudulent sale by seller amounts to cheating U/s 420 of IPC you can file criminal complaint against them for cheating and fraud. Also you can file civil cases against the developer for the recovery of the money towards. If you are in possession of the site, you can file for permanent injunction against the earlier owner and the seller as common defendant in the said case.

Dear client 

You should file a civil case of tranfer of property by subsequent sale an concealment of facts of previous sale on the seller of the property he himself will prove that your sale was original or not if not court will order to recovery of amount of sale given by you. 

Issue legal notice to seller to refund your money with interest as he did not have clear and marketable title to property 

2) once property was sold to third party in 2016 you don’t have any title to property 

1.  The earlier missing owner, who cheated you, if a Bank defaulter and the property is liable to be Auctioned in near future and this cannot be stopped irrespective of the fact that you are a subsequent buyer.

2.  The law will presume that earlier owner has connived with you and fraudulently transferred the property to you without clearing the Bank loan.

3.  You could not have purchased the property without scrutinizing the original agreement of earlier owner, which is in the custody of the Bank. Hence your deal is null & void.

4.  However, you can lodge an Police FIR for fraud and cheating and a Civil case, against the earlier owner and his family, for recovery of your purchase amounts and interest,

Dear Sir,

You are advised not to proceed. But instead proceed to get back the amount you paid. File complaint with police, get issue a legal notice and file a consumer case or civil case. 

A case of fraud and forgery. A criminal complaint must be filed against the persons who duped you.

Regards 

1. if there was no registered agreement between the earlier buyer and your seller, then the bank cannot now claim on this property

2. if the above is true, that is, there was no registered document in favour of the earlier buyer, and further that you had before buying this property, taken a proper search in the registrar's office for third party claims and also given public notice in newspapers inviting claims, then you will be considered as a 'bonafide purchaser for value and without notice' and as such will be protected under the law

3. however if the bank claims that there was a registered document in favour of the earlier buyer on basis of which it had passed loan to that buyer, then the right of the bank will prevail

First of all ascertain whether the property was sold to you by fraudulent means.

What about the original title documents of the property while you purchased the property? especially the link title document, whether you verified that or not?

whether you obtained a legal opinion from an advocate before buying this proeprty?

You may not fine any entry in EC about the previous buyer's mortgage transaction, however if it was a registered sale deed done to him in the year 2016 you can find that entry in the EC, did you verify it?

What is your vendor telling about this?

Have you lodged a criminal complaint for the offences of cheating and breach of trust against your vendor with the local police station about this fraudulent sale of property to you?

First analyse the situation, confirm if you have been cheated by this fraudulent transaction then you may initiate proper steps legally agaisnt the vendor to protect your interests in the property at least  to the money you have paid to the vendor.

Discuss with a local advocate on the basis of all the documents in yor possession and proceed on the advice received.

1. As per the information mentioned in the present query, makes it clear that the third person had only sale agreement, but not all other documents like sale deed etc. which you are having.
2. You are the only one who has right over the property, and how the bank had given loan when there was already a sale deed executed in your name in the registrar’s office.
3. You should file a suit for injunction against bank for taking the possession of the property and contest the same as you are the legal owner then how can they say someone else is the owner and they had given loan to him.
4. Rest, you are free to call me at any time for further legal assistance.