Before the bank's single sale certificate covering both flats, you say that there are separate chains of title-documents in respect of each flat. As there are two individual, independent flats, these can be sold separately and not necessarily together. Please get the agreements of sale/ sale deeds drafted by a competent advocate, comply with the society's formalities and execute the necessary documents.

Request bank do execute deed of rectification 

legally split the single combined property into two distinct units (Flat 1101 and Flat 1102), referencing the original Bank Sale Deed. 

2) Sub-Registrars rely on iSarita software in Maharashtra and will flag a mismatch if the property identifier being sold does not perfectly match the identifier in your acquiring Index-II.

3) Once the titles are split into two distinct sets of Index-II documents, you can comfortably proceed with executing two separate Sale Agreements for the incoming buyer

Your lawyer can draft and execute two separate, concurrent Sale Agreements (one for Flat 1101 and one for Flat 1102) directly to the buyer.  

2) recitals of both new agreements, It must state that the seller acquired both properties collectively via a single Auction Sale Deed (the Mother Deed), but is now conveying the individual, distinct entities (demarcated by their separate society share certificates and electric meters) separately.

You can legally execute and register two separate Sale Deeds / Agreements for the buyer based on your single, combined Bank Sale Deed. The fact that you purchased both units under a single, combined auction sale deed does not "merge" the properties into a single legal entity forever. They remain two distinct physical and administrative assets (Flat 1101 and Flat 1102), as evidenced by your individual society share certificates, separate electricity bills, and separate maintenance chains.

You may draft two distinct sale agreements/sale deeds, Agreement 1 (for Flat 1101) and Agreement 2 (for Flat 1102). Each document must specify the distinct flat number, its exact boundaries, its specific share certificate number, and its assigned Undivided Share (UDS) of the land.

You can present both deeds for registration at the Sub-Registrar's Office (SRO).The SRO will calculate the stamp duty and registration charges individually based on the market value (ready reckoner/circle rate) or the actual consideration value of each separate flat.Once registered, the buyer will receive two distinct Index-II documents, one for Flat 1101 and one for Flat 1102.

If the buyer is buying both flats simultaneously (even with two separate home loans), the financing bank(s) will handle the original document. If it's a single bank funding both loans, they will keep the original in one file and a certified copy in the other. If the buyer is using two different banks, the primary bank will hold the original, and a formal, notarized "Deed of Covenant for Production of Documents" will be executed, ensuring the second bank has legal access to the original title copy when needed.

Request two separate clear-clearance and transfer NOCs from the housing society office for Flat 1101 and Flat 1102.

With the assistance of an experienced lawyer in the local draft two separate Sale Agreements, making explicit cross-reference to your single parent Bank Auction Deed in the recitals of both. Provide a copy of the draft agreements to the buyer's home loan bank(s) to ensure their legal cell approves the "Deed of Covenant" for the shared original document.

When you say that the flats were 'merged' by the previous owner, don't they exist as separate, individual and independent units anymore? Are there no separate, exclusive accesses to each flat? Please clarify.

Since the previous owner merged the properties physically and financially to secure a single large loan, the bank only seized and sold what was on their books: a single "amalgamated" security. They will not execute a rectification deed because, to them, there is no clerical error to rectify the single unit description was intentional.

Since you cannot involve the bank, you do not need a Rectification Deed. A rectification deed requires the original seller's signature anyway.  Hence you do not need to alter your parent Bank Sale Deed to sell the flats separately. You can legally split the property at the time of conveying it to the incoming buyer.

Your lawyer will draft two separate Sale Deeds for the new buyer (Deed 1 for Flat 1101, Deed 2 for Flat 1102).

In both deeds, under the history of the property, your lawyer will explicitly explain the mismatch to the Sub-Registrar and the buyer's bank. The text should read like this:

"Whereas the Vendor herein acquired Flat No. 1101 and Flat No. 1102 via a single Bank Auction Sale Deed dated [Date]... And whereas the said properties were treated as a single unit by the Bank due to a prior financial amalgamation... And whereas physically and administratively they continue to hold separate identities via distinct Society Share Certificates, separate electricity meters, and separate maintenance assessments... The Vendor is now conveying the absolute individual title of Flat No. 1101/1102 separately..

If the incoming buyer's bank is not willing to accept your two sale deeds, you can obtain a confirmation letter as you already have two separate share certificates and separate maintenance bills, request a formal Letter of Status Confirmation from the housing society's management committee. The letter should explicitly state that Flat 1101 and Flat 1102 are recognized by the society as two independent structural units, with independent voting rights and separate maintenance liabilities.

Have your lawyer draft the two independent sale deeds with an airtight "Recital" explaining the background. Share these drafts with the buyer’s bank's legal team immediately. In 90% of cases, a clear, transparent recital backed by individual society share certificates is more than enough to satisfy a title clearance report.

Since the previous owner merged the properties physically and financially to secure a single large loan, the bank only seized and sold what was on their books: a single "amalgamated" security. They will not execute a rectification deed because, to them, there is no clerical error to rectify the single unit description was intentional.

Since you cannot involve the bank, you do not need a Rectification Deed. A rectification deed requires the original seller's signature anyway.  Hence you do not need to alter your parent Bank Sale Deed to sell the flats separately. You can legally split the property at the time of conveying it to the incoming buyer.

Your lawyer will draft two separate Sale Deeds for the new buyer (Deed 1 for Flat 1101, Deed 2 for Flat 1102).

In both deeds, under the history of the property, your lawyer will explicitly explain the mismatch to the Sub-Registrar and the buyer's bank. The text should read like this:

"Whereas the Vendor herein acquired Flat No. 1101 and Flat No. 1102 via a single Bank Auction Sale Deed dated [Date]... And whereas the said properties were treated as a single unit by the Bank due to a prior financial amalgamation... And whereas physically and administratively they continue to hold separate identities via distinct Society Share Certificates, separate electricity meters, and separate maintenance assessments... The Vendor is now conveying the absolute individual title of Flat No. 1101/1102 separately..

If the incoming buyer's bank is not willing to accept your two sale deeds, you can obtain a confirmation letter as you already have two separate share certificates and separate maintenance bills, request a formal Letter of Status Confirmation from the housing society's management committee. The letter should explicitly state that Flat 1101 and Flat 1102 are recognized by the society as two independent structural units, with independent voting rights and separate maintenance liabilities.

Have your lawyer draft the two independent sale deeds with an airtight "Recital" explaining the background. Share these drafts with the buyer’s bank's legal team immediately. In 90% of cases, a clear, transparent recital backed by individual society share certificates is more than enough to satisfy a title clearance report.

You can legally execute 2 separate sale deeds with the buyer 

The historical birth of the 2 flats was as separate flats for which there are separate chain documents 

Just due to an intervening bank auction sale in which the 2 flats were sold as a single unit, will not change the original identity of the 2 flats as separate units. This is supported by the fact that there are 2 separate share certificates. Had there been a merger the 2 separate share certificates would have to be surrendered to the society in lieu of a single share certificate for the 2 units recognizing them as a single unit 

In the society records the 2 flats are still separate independent units 

So I don't see any impediment in executing 2 separate sale deeds