The Kerala High Court in a recent case ruled that the restrictive interpretation adopted to the application of the limit prescribed with reference to yearly deposits by clubbing Public Provident Fund ( PPF ) accounts is incorrect. The court quashed the order and directed to the respondents to credit the amount of Rs.6,87,021/- (Rupees Six lakhs eighty seven thousand and twenty one only) to the accounts of the petitioners with interest, as applicable under the PPF Act.
The 3rd petitioner, Ameena Rafiq is the mother of the 1st and 2nd petitioners. The dispute in this writ petition is with regard to the interest accrued in three separate PPF accounts opened with the 2nd respondent herein by the petitioners.
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The 3rd petitioner started a PPF account No.821 with the 2nd respondent Post Office. Since the 1st and 2nd petitioners were minors during the period when account No.821 was started, and since the 3rd petitioner also wanted to have separate savings accounts in the name of her children, she opened separate PPF accounts with the Post Office in the name of 1st and 2nd petitioners as Account Nos.822 and 823. Remittances were being made in the afore PPF accounts. It is straight away to be noticed that the 1st petitioner attained majority on 24.12.2005 and the 2nd petitioner attained majority on 26.09.2007.
The amounts lying in the PPF accounts were not withdrawn even after attaining majority, by the 1st and 2nd petitioners. They continued with the PPF accounts even thereafter. The respondent issued communication addressed to the 3rd petitioner herein informing her that, since the deposit made in the afore three accounts, taken together, would exceed the limit prescribed by the various statutory provisions/schemes, the entire interest of Rs.6,80,000/- have to be forfeited by the Post Office. On the very next day, an amount of Rs.6,87,021/- representing the accrued interest lying in the three PPF accounts put together, was appropriated by the 2nd respondent.
The writ petition has been filed by the petitioners seeking a direction to re-credit the amount of Rs.6,87,021/- to the accounts of the petitioners with interest from the date of debit till the date of actual credit.
The deposits were made by the petitioners with specific reference to the provisions under the PPF Scheme, 1968. He would refer to Rule 2(a) of the Scheme to point out that the PPF account is covered by the said Scheme. He would also submit that under Rule 3(1) of the Scheme, an individual is permitted to operate or start an account on his own name as well as in the name of his minor children in his status as a guardian.
The admitted facts are that the petitioners had started three separate PPF accounts. At the time of starting the PPF accounts, as regards the petitioners 1 and 2, they were minors. They attained majority during 2005 and 2007. They have not closed the accounts or withdrawn the amounts even after attaining majority. The 3rd petitioner was making deposits in the individual accounts in the name of petitioners
1 and 2, when they were minors.
The respondent stated that there is a limit prescribed by the Scheme as well as the Rules for making deposits in the PPF accounts. It was found that a maximum limit has been prescribed every year by the Scheme. The said maximum limit stood revised every year. It is the case of the respondents that if the three accounts are taken together, the deposits made would exceed the limit prescribed.
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The provisions of the Post Office Savings Accounts Rules, 1981, speak about starting a “savings account”. Even as regards a savings account, the same can be started on behalf of a major as well as on behalf of a minor. It is true that the said Rules only apply as regards the savings account. However, a reference to the said Rules also gives an idea as regards the nature of opening an account with the Post Offices.
A single bench of Justice Harisankar V. Menon observed that the Central Government had been promoting the starting of various accounts in the name of minors and that is why such beneficial schemes were being introduced by the Central Government like the PPF Scheme, wherein separate accounts can be opened by a major in the name of his/her minor children.
“In such circumstances, the restrictive interpretation being adopted to the application of the limit prescribed with reference to yearly deposits by clubbing the accounts together is incorrect especially when it is admitted that the children have already attained majority”the bench added.
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The court quashed the order and directed to the respondents to credit the amount of Rs.6,87,021/- (Rupees Six lakhs eighty seven thousand and twenty one only) to the accounts of the petitioners with interest, as applicable under the PPF Act.
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