Can a father withdraw PPF investments made by him in the name of his daughter, to use the money for her maintenance? A recent case raised this very issue, in which Delhi High Court delivered a ruling, clearing who is entitled to the money withdrawn from such a PPF Account.
In this case, the father closed the PPF account on maturity which he had opened in his daughter’s name when she was a minor, and transferred the money to his personal account. While admitting to it, the man said he was entitled to close the account and the amount was being used for the benefit of the daughter.
So, why did the daughter go to court against her own father? What did the court rule and who does the amount actually belong to? Read on to know what happened in this daughter vs father legal fight.
Daughter vs father legal fight over PPF amount: What happened?
A Delhi-based man had opened a PPF Account for his minor daughter in the State Bank of India, Janakpuri Branch on December 9, 1999. The PPF account matured on March 31, 2016.
The daughter, for whom the PPF account was opened, attained the age of majority on November 13, 2016. Months later in September 2017, when she approached the Bank to convert her minor PPF account into a major / normal account in her own name (removing the guardian’s name), the Bank refused to do so.
She was told that the said PPF account matured on March 31, 2016 and was closed on October 18, 2016 by her father, who had withdrawn the entire amount. She then decided to file a suit for the recovery of the entire PPF amount of Rs 8,13,853.79 along with future interest.
How did the father withdraw the PPF money he deposited for his daughter?
On maturity, “the PPF account allegedly, unlawfully, without process of law and without informing the daughter, was closed on September 24, 2017 and the entire amount of Rs 8,13,853.79 was withdrawn,” the daughter claimed in her complaint.
While taking out this amount, the father had given an undertaking to the Bank saying, “This amount will be spent on the daughter’s higher education & well-being. I am enclosing copy of the PPF passbook, passport copy for age proof.”
The daughter is pursuing her BBA from Technical Institute of Advanced Studies, with her annual fee being Rs 85,200. She claimed that she is finding it difficult to meet her educational and other expenses in the absence of funds.
Why did the daughter file a suit against her father?
In her complaint, she claimed that there were matrimonial disputes between her mother and father and she was living with her mother. The daughter alleged that her father has taken away all her funds, only to pressurise the mother by putting them under financial constraint.
The father, on the other hand, admitted to withdrawing the Rs 8.13 lakh from the PPF account but said this was done in “good faith” without any ulterior motive of causing any loss or harm to the daughter.
Further, he defended his move by stating that he was entitled to close the PPF account, as it had already lapsed, and the amount was being used for the benefit of the daughter. He added that pursuant to orders passed by the Dehradun Family Court in 2016, he had been paying Rs 12,000 monthly maintenance to his daughter from June 16, 2016 to May 28, 2018.
Sharing that the total payments so far amount to Rs 6,00,000, the father sought that the money be adjusted against the amount withdrawn from the PPF account. He also cited the Rs 35,000 monthly maintenance paid to his wife under orders of the Uttarakhand HC, and suggested that the daughter had already benefited from these.
What did the court say?
A Delhi trial court had in 2023 rejected the father’s defence and held that maintenance paid under court orders could not be adjusted against the daughter's PPF funds. It consequently directed the man to pay the entire amount withdrawn (Rs 8.13 lakh), together with 8% interest.
Challenging this order, the father approached the Delhi High Court, which pointed out that the “case raises the issue of entitlement of a father to utilise the investments made by him in the name of a child, to use such money in payment of maintenance of the child.”
Maintenance is the day-today expenditure in the up-bringing of the child which is the independent legal responsibility of a parent, the HC underlined. “Merely because of a marital discord, the investments cannot be used by the father, towards the maintenance as it would simply amount to utilisation of the child‟s money for the discharge of the legal responsibility of the father.”
Daughter vs father legal fight over PPF amount: What was the final order?
Delhi HC cleared that the investment being in the name of the child, the daughter was entitled to receive the Rs 8.13 lakh PPF amount, and the father can’t use it to offset his responsibility of maintenance towards the child. The father was liable to give this money to the daughter.
It held that the father may have been paying Rs 12,000 to the daughter but that was in recognition of his responsibility to maintain her.
With this, the Delhi HC upheld the trial court’s order, directing the father to pay the entire sum of Rs 8,13,853.79 to the daughter along with 8% per annum interest, being the interest rate for PPF Account in the year 2016.
