The Kerala High Court allowed Post Office to forfeit the interest amount on the excess amount paid in the PPF Account by a guardian in their minor’s account as per the Public Provident Fund Scheme 1968.

The Bench of Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar V.M observed, “From the above charts, it can be seen that every year, certain limits have been crossed. However, the said discrepancy could not be noticed by the appellants herein till it was pointed out in the internal audit in the year 2017. Such payment of excess interest would amount to unjust enrichment, and the same would be a burden on the public exchequer.”

Advocate Jaihankar V.Nair represented the Petitioner, while Advocate Siddarth represented the Respondents.

Case Brief

A Writ Appeal was filed against the order of the Single Judge of the High Court directing the Post Office to pay the amount of Rs.6,87,021/- to the Respondents with interest, as applicable under the Public Provident Fund Act 1968.

The Mother and her two children were original-Petitioners. It was contended that the mother had opened a PPF Account in the name of her minor children. However, the mother continued to deposit the amount in the PPF Account at the Post Office, even after the children attained majority.

Later, the Post Office informed the mother that the amounts deposited in the afore three accounts, taken together, would exceed the limit prescribed under the Public Provident Fund Scheme 1968 since the children were minors. On this ground, an amount of Rs. 6,87,021/- towards accrued interest credit in the three PPF Accounts put together was appropriated by the Post Office.

Resultantly, the mother filed the Writ Petition and directed the Post Office to pay the said amounts. Accordingly, a Writ Appeal was filed challenging the said order.

Court’s Observation

The High Court noted that the Scheme 1968 provides the limit of deposit of Rs. 1 lakh in a year by an individual in her self-account and accounts opened by her on behalf of minors of whom she is the guardian. Thus, as per Rule, the excess deposits made into these minor accounts, during the period till the minors attained the age of majority, will be taken as the deposits made by the mother, which violates the limit prescribed under Rule 3 of the Scheme 1968.

The Court highlighted that the PPF Accounts continued to operate, and contributions were made for which interest had already been paid regularly to the Respondents by the Post Office.

“As per Scheme 1968, if the mother operates the account of minor children and deposits the amount, the amount deposited in all three accounts taken together will be clubbed for the limit prescribed under the Scheme from time to time”, the Court said.

The Bench held that the payment of excess interest would amount to unjust enrichment, and the same would be a burden on the public exchequer.

Accordingly, the Writ Appeal was allowed.

Cause Title: Union Of India V. Fareeda Sukha Rafiq (Neutral Citation: 2025:KER:60445)

Appearance:

Petitioners: Advocates Jaihankar V.Nair, Christy Theresa Suresh

Respondents: Advocates Siddarth, Latha Anand, M.N.Radhakrishna Menon and S.Vishnu

Click here to read/download Judgment


Kerala High CourtJustice Sushrut Arvind DharmadhikariJustice Syam Kumar V.M.

Pridhi Chopra

    Pridhi Chopra was earlier practicing as an Advocate in Delhi. She pursued B.A. (H) English from Gargi College, University of Delhi, and subsequently pursued a degree in Law.