Can money a father invested for his daughter be adjusted against the maintenance he was ordered to pay her and his estranged wife? The Delhi High Court has drawn a clear line between a child’s investment and a parent’s maintenance obligation.

NEW DELHI: The Delhi High Court has held that a father cannot use money invested in his daughter’s Public Provident Fund (PPF) account to discharge his legal responsibility of paying maintenance to his daughter or estranged wife.

Justice Neena Bansal Krishna was hearing an appeal filed by Sudhir Kawatra against a District Court order directing him to return the PPF corpus to his daughter, Shamli Kawatra, along with 8% interest.

Sudhir had opened the PPF account for his daughter in 1999. According to Shamli, when the account matured in 2017, she approached the bank and discovered that her father had already withdrawn the entire corpus of more than ₹8 lakh in 2016 and closed the account. She claimed that the money was meant for her education and well-being.

The daughter thereafter filed a recovery suit. The District Court directed the father to return the entire amount with interest, following which he approached the Delhi High Court.

The father argued that he had already been paying maintenance for his daughter pursuant to a Family Court order and that around ₹6 lakh from the PPF corpus had effectively gone towards her well-being. He further submitted that he was also paying additional maintenance to his estranged wife pursuant to an order of the Uttarakhand High Court, which was also being used for the daughter.

The High Court, however, rejected the attempt to adjust these maintenance payments against the daughter’s PPF corpus. It held that money invested in the child’s name belongs to the child, while maintenance is a separate legal obligation of the parent.

The Court observed:

AUGUST“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 distinguished between long-term savings made for a child and the everyday expenditure involved in raising and maintaining the child. It observed:

“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 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 High Court further held that although the father had originally opened and operated the PPF account, the investment was for his daughter’s benefit. Once she became a major, she was entitled to receive it.

The Court said:

“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].”

Accordingly, the Delhi High Court upheld the District Court order directing the father to return the entire PPF corpus to his daughter along with 8% interest.

EXPLANATORY TABLE OF LAWS AND LEGAL PRINCIPLES

CASE DETAILS

COUNSELS APPEARED

KEY TAKEAWAYS

• A father cannot adjust his daughter’s PPF money against maintenance.
• Money invested in the daughter’s name belongs to her.
• Maintenance paid to the daughter or estranged wife does not change this obligation.
• A father managing a minor child’s investment only holds it for the child’s benefit.
• Maintenance and repayment of a child’s separate assets may remain independently enforceable.

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