I suspect that NaffWest are acting within the letter of the law. The facts are that you paid off the mortgage early, rather than NaffWest foreclosing, and that you were unable to pay the mortgage because of your own actions (you were the ones who closed the current account and were so unable to pay the mortgage).(posted 7642 days ago)The reasons behind the action are not really relevant, at least in the eyes of the law.
It isn't clear from your question whether you are in the UK or not at the moment. If you're not in the UK then, ultimately, there isn't much NaffWest can do. They can demand all they like, but they won't be able to get any money out of you. However, you could end up with a credit record that's pretty dire and find you're unable to get another mortgage. That might not be a problem for you if you're not here.
I'd gladly stand corrected if anyone else knows different, but I think you're batting a sticky wicket.