The Delhi High Court has ruled that money deposited in a Public Provident Fund (PPF) account in a child’s name belongs to the child, even when the parent made the contributions. The court also said such money cannot be treated as a substitute for the parent’s separate maintenance obligations.
What the Court Ruled
The Delhi High Court has held that funds in a PPF account opened in a minor child’s name cannot be claimed by the parent who contributed the money.
The case involved a father who had opened a PPF account in his daughter’s name and made contributions to it. After the account matured, he withdrew the money. The daughter later sought the amount from her father after becoming a major.
The father argued that the amount should be adjusted against the maintenance payments he had already made under a court order.
The court rejected this argument.
It held that the money deposited in the PPF account belonged to the daughter. The fact that the father had made the contributions did not give him ownership of the funds.
PPF Money Could Not Be Adjusted Against Maintenance
The court also made a distinction between the PPF money and the father’s obligation to pay maintenance.
The father had paid ₹6 lakh towards court-ordered maintenance. However, the court said these payments could not be set off against the money lying in the daughter’s PPF account.
Once the father withdrew the PPF maturity proceeds, he held the money in his capacity as the child’s guardian. He was required to hand it over to his daughter after she became a major.
The court upheld the decree directing payment of ₹8,13,853.79, along with 8% annual interest.
What This Means for You?
If you open a PPF account in your child’s name, the money in that account is treated as belonging to the child.
This judgment makes it clear that making the contributions yourself does not automatically give you ownership of the money. You also cannot treat those funds as a replacement for a separate legal obligation to support your child.
The ruling highlights the importance of understanding who legally owns an investment or financial account, especially when it is opened in a child’s name.
