In a landmark decision defining parental financial boundaries, the Delhi High Court has affirmed that a parent holds a minor child’s Public Provident Fund (PPF) strictly in a fiduciary capacity as a legal guardian. The ruling comes after a college student, Shamli Kawatra, discovered upon maturity in 2017 that the PPF account opened in her name by her father in 1999 had been completely drained and closed a year prior without her consent.
The father, Sudhir Kawatra, had withdrawn the accumulated corpus exceeding ₹8 lakh in 2016 from the bank under the pretext of funding his daughter’s education and welfare. However, following marital discord and subsequent separation, Shamli began living with her mother and faced severe financial constraints while pursuing higher education. Upon realizing her savings had vanished, she took her father to court to reclaim the money she was lawfully entitled to receive.
Delhi High Court Rejects Father’s Maintenance Offsetting Defense
Presiding over the case, Justice Neena Bansal Krishna upheld a lower district court order directing the father to refund the entire ₹8 lakh corpus to his daughter alongside 8% annual interest. Sudhir Kawatra had appealed the district court verdict, arguing that he had already disbursed nearly ₹6 lakh toward his daughter’s living expenses and education under separate maintenance orders issued by the Uttarakhand High Court.
The High Court firmly rejected the argument that court-ordered maintenance payouts could be offset against a child’s long-term PPF savings. The bench noted that day-to-day maintenance is an independent, legal responsibility of a parent that cannot be satisfied by cannibalizing financial assets invested in the child’s name.
Fiduciary Capacity vs. Personal Maintenance Obligations
Elaborating on the legal distinction between upbringing expenses and long-term investments, the High Court stressed that savings created in a child’s name belong exclusively to the child upon maturity. The court observed that parents may deposit yearly savings into an account during a child’s early years, but those funds remain an investment earmarked for the child’s future independence.
“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 stated.
The bench concluded that marital discord between parents cannot serve as a justification for a guardian to liquidate a child’s assets to discharge personal legal obligations, such as spousal or child maintenance.
