A father cannot appropriate a child’s investment corpus towards his independent maintenance obligation.

The respondent, Shamli Kawatra, was the beneficiary of a PPF account opened in her name by her father, Sudhir Kawatra, on 9 December 1999. The account matured in 2016, and the appellant closed it and withdrew ₹8,13,853.79.

While withdrawing the amount, he undertook to the bank that it would be spent on the respondent’s higher education and well-being.

The respondent attained majority on 13 November 2016 and subsequently learned that the account had been closed and the funds withdrawn by the appellant.

She filed a suit for recovery of ₹8,13,853.79 with interest. The appellant admitted the withdrawal and undertaking but contended that the amount had been used for the respondent’s benefit, including payment of maintenance of ₹12,000 per month pursuant to a Family Court order.

The Trial Court passed a decree under Order XII Rule 6 CPC for the entire amount with interest at 8% per annum, holding that the maintenance payments could not be adjusted against the PPF corpus.

The appellant challenged that decree in the present first appeal under Section 96 read with Order XLI CPC.

Whether the appellant, having withdrawn the PPF amount standing in the respondent’s name, was entitled to retain or use it for discharging his independent obligation to maintain her?

Whether the respondent was entitled to a decree under Order XII Rule 6 CPC on the basis of the appellant’s admissions regarding withdrawal of the amount and the undertaking to use it for her benefit?

Whether the appellant’s reliance on the PPF Act and the alleged lawful closure of the account defeated the respondent’s claim for recovery?

The Court applied Section 96 read with Order XLI CPC governing first appeals and Order XII Rule 6 CPC, which permits judgment on clear admissions of fact.

It considered Section 10 of the Public Provident Fund Act, 1968, concerning protection for acts done in good faith under the Act or the PPF Scheme, but distinguished the legality of closing the account from the appellant’s entitlement to retain the withdrawn funds.

The Court held that money invested in the name of a minor child for the child’s benefit is held by the parent in a fiduciary or guardianship capacity and cannot be appropriated towards the parent’s separate legal obligation to maintain the child.

Maintenance is a recurring and independent legal responsibility, and payments made pursuant to a maintenance order cannot ordinarily be adjusted against the child’s separate property or investment corpus.

The appellant’s admission that he had withdrawn ₹8,13,853.79 and had undertaken to use it for the respondent’s benefit established the material facts necessary for relief under Order XII Rule 6 CPC.

Even assuming that the account had been lawfully closed under the PPF Act, lawful closure did not confer beneficial ownership of the proceeds upon the appellant; he held the money only in a fiduciary capacity for the respondent, who became entitled to it upon attaining majority.

The Court rejected the proposed adjustment of ₹6,00,000 paid as maintenance because those payments represented the appellant’s independent obligation as a father and could not be treated as utilization of the respondent’s PPF funds.

Payments made to the respondent’s mother as spousal maintenance were likewise irrelevant to the respondent’s separate entitlement.

Accordingly, the admitted facts justified a decree for the entire PPF amount rather than merely the partial amount initially sought under the application.

The respondent was entitled to recover the entire sum of ₹8,13,853.79 with interest at 8% per annum.

The decree passed by the Trial Court under Order XII Rule 6 CPC was upheld, and the appeal and pending applications were dismissed.