Father cannot use money in daughter's PPF account to pay maintenance: Delhi High Court

The Delhi High Court recently held 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 [Sudhir Kawatra Vs Shamli Kawatra].

In the judgment delivered on August 3, Justice Neena Bansal Krishna stated that the daughter is entitled to receive the investment amount made in her name and the father, who opened the investment account, can only hold it as a guardian.

The Court observed that the father cannot use this investment amount towards meeting his legal obligations of paying 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 utilized by the father to off-set his responsibility of maintenance, towards the child,” the Court said.

Sudhir Kawatra had opened a PPF account in the year 1999 for his daughter Shamli Kawatra.

Shamli alleged that when she approached the bank on maturity of the PPF in 2017, she was informed that her father had withdrawn the entire corpus of over ₹8 lakh in 2016 and closed the account.

She alleged that as per the father’s undertaking given to the bank, he had withdrawn the amount for the purpose of his daughter’s education and well-being.

The daughter filed a suit seeking recovery of the amount. The district court directed the father to pay the entire corpus to her along with 8 percent of interest.

The father then approached the High Court against the district court order.

Shamli, who is now a college student, claimed that the PPF amount was not used towards her educational expenses and stated that she finds it financially difficult to pay the fee.

She stated that due to marital discord between her parents, they had separated and she was living with her mother. She stated that her father had deliberately withdrawn the PPF amount to create financial strain on her mother.

Meanwhile, Sudhir claimed that pursuant to family court’s order, he had been disbursing the maintenance towards her well-being which amounted to about ₹6 lakh taken from the PPF corpus.

He also stated that as per the order passed by Uttarakhand High Court, he has been paying additional maintenance towards his wife, which is also being used by Shamli.

The Court agreed with the decision of the district court in observing that the responsibility to maintain his child is an independent right of the father and it cannot be adjusted against the PPF amount.

Further, the Court observed that the right of wife to maintenance is an independent right and to meet that legal obligation, the daughter cannot be denied her right to the money to which she is lawfully entitled.

It stated that the family court’s maintenance order towards the daughter was in recognition of the father's responsibility to maintain his daughter. 

“It would be significant to note that a parent during the childhood may make investment and create a corpus by putting savings annually, in some account, but essentially it is an investment to be utilized in future. However, the maintenance is the day-today expenditure in the up-bringing 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 utilization of the child‟s money for the discharge of the legal responsibility of the father,” the Court stated.

The Court stated that though the PPF account was opened by the father, it was made for the benefit of his daughter and she was entitled to it after attaining the age of majority.

“The amount could not have been transferred by the defendant [father] to his own account and he was liable to give this money to the plaintiff [daughter].”

Therefore, the Court upheld the district court’s decision directing the father to return the entire PPF corpus to his daughter along with 8 percent interest.

Advocates Rajnish Kumar Jha and Dolli Rani appeared for the father.

Advocate Shubham Gupta appeared for the daughter.

[Read Judgment]