Post Office Can Forfeit Interest On Excess PPF Contribution Made By Guardian In Minors' Accounts Even After They Attain Majority: Kerala HC

The Kerala High Court has recently held that the post office can forfeit the interest that has accrued on the public provident fund (PPF) contribution made by a guardian in their minor's account in excess of the limits permissible under the Public Provident Fund Scheme, 1968.Reversing the finding of the single bench, the Division Bench comprising Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar V.M., observed: “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…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.”In the present case, the 3rd respondent mother opened three PPF Accounts in her own name and in the names of her two minor children (respondents 1 and 2) in 2002. In the years 2005 and 2007, the two children attained majority but the amounts in their accounts were not withdrawn and monies continued to be deposited in these. In 2017, the 2nd appellant post master issued a communication to the respondents and forfeited an amount of Rs. 6,87,021/- towards accrued interest credited in the three PPF Accounts put together. Aggrieved, the writ petition was preferred. The single judge allowed the petition and directed the appellants to re-credit the amount to the respondents.The Division Bench looked into Rule 3 of Scheme 1968 and Sections 3 and 4 of the PPF Act as well as the tabulation of the interest accrued and excess deposits made in the accounts. It noted that the total interest accrued in the minors' accounts till their respective dates of attainment of majority is the only amount that was forfeited.The Bench further observed that the appellants have rightly appropriated only the interest amount for the period till the minors attained majority on the excess contribution deposited. Thus, it allowed the appeal.Case No: WA No. 1636 of 2025Case Title: Union of India and Ors. v. Fareeda Sukha Rafiq and Ors.Citation: 2025 LiveLaw (Ker) 549Counsel for the appellants: Jaishankar V. Nair – Senior Panel Counsel, Christy Theresa Suresh Counsel for the respondents: MR Siddarth, Latha Anand, M.N. Radhakrishna Menon, S. Vishnu (Arikkattil)Click to Read/Download Judgment

Post Office Can Forfeit Interest On Excess PPF Contribution Made By Guardian In Minors' Accounts Even After They Attain Majority: Kerala HC

K. Salma Jennath

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