Can your parent withdraw money from your PPF? Delhi HC orders father to return daughter’s entire corpus

A father’s decision to withdraw more than ₹8 lakh from a Public Provident Fund (PPF) account opened in his daughter’s name has landed him in a legal battle, with the Delhi High Court ruling that the money could not be used to meet his own maintenance obligations.

The case involved Sudhir Kawatra, who opened a PPF account in 1999 for his daughter Shamli Kawatra. In 2016, he withdrew the entire corpus of over ₹8 lakh and closed the account, a year before Shamli was due to claim the funds on maturity, according to a report by The Bar and Bench.

When Shamli approached the bank in 2017 to access the PPF proceeds, she found that the account no longer existed.

Shamli then moved court, alleging that her father had withdrawn the money on the pretext of using it for her education and well-being, citing an undertaking he had given to the bank. She also said that she was facing difficulties in meeting her educational expenses.

According to Shamli, her parents had separated following marital discord, after which she began living with her mother.

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A district court directed Sudhir to return the entire PPF corpus to his daughter along with 8% interest. The father challenged the order before the Delhi High Court.

What did the Delhi High Court say?

The Delhi High Court, in a judgment delivered by Justice Neena Bansal Krishna on August 3, upheld the district court's order and said the father could not use the PPF investment made in his daughter’s name to meet his legal obligations towards maintenance.

The court noted that while Sudhir had opened the account, he held the money only in his capacity as the child’s guardian. The funds belonged to the daughter and she was entitled to receive them.

Sudhir argued that he had already been paying maintenance for his daughter’s well-being, amounting to nearly ₹6 lakh. He also referred to an Uttarakhand High Court order requiring him to pay additional maintenance to his wife and claimed that this amount was also being used by their daughter.

The Delhi High Court, however, rejected the argument that the PPF corpus could be adjusted against maintenance payments.

“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,” the court said, as reported by Bar and Bench.

The court further underlined the difference between a parent’s responsibility to provide for a child’s everyday needs and money invested for the child’s future.

“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.

The ruling makes clear that a parent’s obligation to pay maintenance cannot simply be set off against money invested in a child’s name. The court also held that a wife’s right to maintenance is an independent legal obligation and cannot be met by taking away the child’s investment.

In this case, the court concluded that Shamli could not be denied the PPF money to which she was lawfully entitled.