No if the property is mortgaged without NOC of bank no valid agreement for sale of the promptly can be made.

Once the bank takes possession, it may go ahead with the auction selling of the property as per rules. 

you cannot enter into sale deed when property is mortgaged 

you need bank consent to sell to sell the property 

Yes if you get a noc and sale certificate from bank then you can buy the same

 It is very delicate issue.  You may be cheated by bank or by owner.  However, if you get some good legal advice from any DRT advocate, you can talk to the bank along with the owner. Make payment of dues of bank on behalf of owner vide cheque, DD or RTGS . Before making payment to the bank, enter into agreement with owner and mention the payment to be made to the bank for redemption of  equitable mortgage.  Take the possession of original title documents from the bank yourself, though it would be returned to  him on his signature.

1.  IT would be a criminal offence of Cheating, Breach of Trust, Mischief, etc.... for the seller & buyer to execute ANY property that is mortgaged to a Bank.

2.  HOWEVER, with proper consent and by following due procedure of law, the mortgage amount may be settled /closed and proper NOC (no dues certificate) can be taken and then proceed with the Sale Deed.

Sale will be illegal and criminal offense. Property vest in bank on default in repayment of loan.

Once the property has been declared under NPA for having taken physical possession, then the owner is divested of any rights in the property, therefore it not advisable to enter into any sale agreement with the owner for buying this property

Before selling clearence from bank is required.