CIBIL : Home loan got rejected - on a credit card, which is not mine?

Recently, I had applied for home loan and same has been got rejected. I had checked my cibil score and it is 550. It's also showing an outstanding amount on a credit card, which is not mine and I had never used. Even the credit card never reached me. After coming to know this I had informed the bank about this issue.

1- How to rectify this issue?
2- How to resolve this dispute with the bank?

First check with your bank in writing and keep record of all the communications. Check this article how?
If still bank not able to answer you contact RBI's Banking Ombudsman.

Check these two threads -
1- First
2- Second

You have to talk to bank about that and clear all the mis understandings. This is the only way to overcome the problem