Buying flat without conversion of the land

Q: I have booked a flat in Dum Dum area, Kolkata, 7 months ago paying 20% of the sale value. At the time of booking I was informed by the developer that the land is not converted (from agricultural to residential) and also no mutation has been done from BLRO. However, I was informed that these would be done in due course of time and before I apply for housing loan with banks.

The status right now stands that the mutation has been done but conversion has not been done and the developer informed that he will not do so and I have the option to cancel the booking. Also, when I approached banks for housing loan, reputed banks like SBI refused to provide loan in the absence of conversion papers. However, there are some banks and financial institutions which are ready to provide loan without conversion papers and some have in fact already approved the whole project.
Now the question is: 1) Is it advisable to go ahead with the property or cancel the booking?
2) If I go ahead with the property, would there be a problems in future (like for flat registration, flat mutation or anything else you are aware of)?
3) In future will it be possible to resale such property without any problems?