Mr. Dharam Veer,
Question of validity of EQM comes later, first comes the question of validity of the action by the concerned executives of the bank.
I don't know in what capacity you are asking this question. But, of course, the inspecting officer of the property and the loan sanctiong authority definitely need to be charge sheeted for major penalty on this case, if it exists in reality. In addition, the lawyer or the law officer of the bank, who might have given clearance on the proposal is also liable to be criminally tried in the court of law.
By the way, in what circumstances, such type of dreadful mistakes happened at the time of sanction of loan?