1. Can a bank grant loan under equitable mortgage in case of join ownership property without calling co-owner to sign in bank manager's presence?
No it is illegal and invalid.
2. Can a bank grant and disburse loan on sale agreement?
Sale agreement cannot be an instrument that can be relied upon for granting loan
3. In equitable mortgage for rural property with kila / khasra no, is it necessary for bank to check mutation before release of loan and intimate revenue department to register lein on property and not to allow further sales?
Generally bank do not register the mortgage hence they are totally unaware of the external happening.
4. In equitable mortgage cases, how Y or Z can check that there is a loan on property as rural property can be sold with mutation records?
No property can be sold on the basis of some revenue records, anyone purchasing the property on such basis cannot claim ownership legally without registry on his name.
5. Till date mutation is in the name of my mother and Z, who is legal owner of plot?
Revenue records will not confer title to the property nor they can be held as title deed.
For all your further questions, a few answers have been given by yourself that the bank has initiated criminal action against those people who criminally manipulated with the help of fake records.
The revenue records alone will not confer the title, hence you may ask your mother to make a registered settlement deed on her share in the property in your favor so that the property is getting a new lease or life in a different legally valid form or to approach court for declaring her title of the property in which she owns 50% share.