To get refund of EMD during property e auction

I had participated in e auction for a property, i was the only and successful bidder I paid 25% of bid amount as EMD , for the remaining amount I applied for home loan in the same branch They accepted the loan application and it was processed and loan was not sanctioned [it took 3 months to say this] because the property was not built as per the saction plan (they have taken permission for 1 house in a floor but constructed 2 houses, it was completely built at the time of sanctioning initial loan same thing mentioned in sale deed ) otherwise properly looks fine after all these I asked for refund of my EMD , I had been hearing from the branch manager that my will be refunded but later on manager along with regional officer turned other way round and said "We cannot sanction loan also not refund EMD .. But you can pay the remaining amount and get it registered, we can provide loan on any other property but not on this auction property" They also said "asking for loan to be sanctioned is not your right we cannot make the same mistake we did before " i argued saying rejection should be on the proper grounds I should not be suffering because of yours there are lot of communication happened in between it is now around 8 months from the date of auction they have not forfeited my money yet I am now in a critical time to decide whether to go with property or with legal fight These are the arguments from both sides Myside : 1. How can they go for auction and obtain legal when they have some dispites 2.if they have sanctioned loan on the same property why couldn't they do it now [age/income/other stuffs are fine with me] 3. How the same bank can have two legal opinions on the same property. BANK : 1. You haven't paid remaining amount in specified time [i applied for loan before end date and end date was extended by manager] 2. There is AS WHERE IS and AS WHAT IS which covers bank 3. You should have done some pre work before going for bidding These arguments results in lot of complications I think result can go any side Please suggest me how to handle this I have paid 7 lakhs as EMD Thanks in advance