Daughter sues father for withdrawing money from her PPF account, Delhi High Court orders return of entire corpus

Can a parent legally withdraw money from their child's Public Provident Fund (PPF) account? An incident involving a legal conflict between a father and daughter over ownership of the PPF account has recently put the focus on parental financial boundaries. The daughter successfully sued her father for deliberately withdrawing all funds from her PPF account and claimed that he attempted to create financial strain on her mother.

The father, identified as Sudhir Kawatra, had opened a PPF account in 1999 for his daughter Shamli Kawatra. However, Sudhir Kawatra withdrew the entire corpus of over ₹8 lakh in 2016 and closed the account before Shamli could claim funds on maturity. When Shamli approached the bank on PPF maturity in 2017, she was disturbed to find that the account no longer existed.

Aggrieved by her father's action, she moved court, accusing him of falsely withdrawing the amount on the pretext of his daughter’s education and well-being, citing Sudhir's undertaking given to the bank. Shamli, now a college student, alleged that she has difficulty funding her educational expenses. According to Shamli, her parents had separated due to marital discord, following which she started living with her mother.

The matter was first taken up in a district court, which directed the father not only to return the entire corpus to his daughter but also to pay 8% interest. Dissatisfied with the district court's judgment, the father then approached the Delhi High Court to challenge the order.

The Delhi High Court bench presided by Justice Neena Bansal Krishna delivered a judgment on 3 August, bringing major relief to the daughter. The court upheld the district court judgment and ruled that a father cannot use the amount invested for his daughter’s education towards fulfilling his individual legal obligations of paying maintenance to his daughter and estranged wife.

What did Delhi High Court judgment say?

The court noted that the father, who had opened the investment account, can only hold it as a guardian and his daughter is entitled to receive the funds made in her name. The father contended his right to the PPF corpus and argued that he had been disbursing the maintenance towards his daughter's well-being, which totalled nearly ₹6 lakh. He also cited an order of the Uttarakhand High Court instructing him to pay additional maintenance to his wife. He alleged that this amount was also being used by their daughter.

According to the ruling, the father cannot use the PPF investment amount to meet his legal obligation to pay maintenance. “Being the investment in the name of the child, she was entitled to receive the amount. The father may have taken the money to which the Plaintiff was entitled, but it was only in the fiduciary capacity, as a Guardian, but cannot be utilised by the father to offset his responsibility of maintenance, towards the child,” Bar and Bench reported, quoting the court order.

As per the judgment, a father's responsibility to pay maintenance cannot be adjusted against the PPF amount. Moreover, a wife's right to maintenance is an independent legal obligation. The court concluded that a daughter cannot be denied her right to the money to which she is lawfully entitled.

“It would be significant to note that a parent during childhood may make an investment and create a corpus by putting savings annually, in some account, but essentially it is an investment to be utilised in future. However, the maintenance is the day-to-day expenditure in the upbringing of the child, which is the independent legal responsibility of a parent. 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,” the court observed as reported by Bar and Bench.