Home Loan Settled, But EMIs Deducted: Delhi Consumer Panel Orders Rs 35,000 Payout

A District Consumer Disputes Redressal Commission in Delhi has ordered a lender to refund Rs 33,584 to a couple after it deducted equated monthly instalments (EMIs) even after accepting Rs 1.16 lakh as full and final settlement of their home loan. The lender must also pay Rs 25,000 for mental harassment and Rs 10,000 towards litigation costs.

The couple had struggled to repay their loan after the husband lost his job during the Covid-19 pandemic. While they later negotiated a one-time settlement, the lender deducted further instalments and delayed issuing a no-dues certificate.

Job Loss Led To Two Years Of Missed EMIs

The couple had taken a housing loan for the house in Mayur Vihar Phase III, Delhi, of Rs 4 lakh in May 2007. They paid Rs 4198 as their EMI per month, and the loan was for 240 months.

They had some problems in terms of payments in 2018, but they managed to settle the remaining instalments with interest together with the late payment fees.

But during the pandemic, Das lost his job, resulting in them missing their EMIs from 2020 till June 2022. In July 2022, Das got another job and started paying their loan dues again.

In June 2022, the lender issued a notice demanding Rs 2,73,067 in outstanding dues. It later initiated recovery proceedings and took symbolic possession of the mortgaged flat on November 1, 2022.

Deductions After Loan Settlement

The lender, after negotiations, accepted Rs 1,16,867 as full and final settlement of the dues outstanding. The couple paid the amount through a cheque dated November 7, 2022. However, the lender deducted another Rs 33,584 from their bank account towards EMIs until June 2023, according to the commission's order.

The commission observed that once a borrower pays the full amount agreed under a one-time settlement, the loan account should ordinarily be closed and a no-dues certificate issued. The lender issued the certificate only on August 7, 2025, while the consumer complaint was pending. The commission also noted that the lender had not provided an explanation for withholding the excess amount.

It directed the lender to refund Rs 33,584 with interest at 9 per cent per annum from December 1, 2022. The amount must be paid to the two complainants in equal shares. The commission declined to direct changes to the couple's CIBIL records, noting that they had admitted to defaulting on EMIs for two years before settling the loan.