Family wins legal battle over post office PPF accounts

A family has won a legal battle with the Department of Posts over four Public Provident Fund (PPF) accounts it had opened 15 years ago. 

A consumer court recently ordered the department to refund Rs 2.8 lakh, which the family had deposited in the PPF accounts at the start, in addition to Rs 500 that they put into each account every year, along with interest for all these years. 

Alivelu Manga Pulavarti and her three children — Mahima Bharthi, Sriram Pulavarti and Bharat Pulavarti — had opened the accounts at the postal head office, Secundrabad, in 2004. With the children being minor at that time, Alivelu was the guardian for the accounts. The family then deposited Rs 500 in each account every year. 

The family moved to Bengaluru in 2013. When they requested the transfer of the accounts, they were shocked to learn that as per PPF rules, they cannot deposit more than Rs 70,000 in each account. What’s more, postal authorities stated that a family cannot open more than one account either. Simply put, the department said that the family had made a mistake by opening multiple accounts and depositing Rs 500 in each account every year thereafter. 

These bits of information were even more shocking because the family was kept in the dark at the time of opening the accounts. 

Feeling aggrieved, the family moved the Bangalore First Additional District Consumer Disputes Redressal Forum. They argued that postal authorities were being “unjust and unreasonable” by keeping the deposits for 10 years and denying interest at the time of maturity on the grounds that the deposits are not in line with the rules. 

They further said that it was only in 2014 that the audit authorities told them about the multiple accounts and the cap on the deposit amount. 

In its defence, the department said the consumer court did not have the jurisdiction to entertain the complaint and asked for its dismissal. 

Ruling on the matter on May 4, 2019, the forum comprising president H R Srinivas and member D Suresh said postal employees cannot act in a negligent manner. Doing so will be tantamount to “misfeasance”, which is an actionable claim. 

The forum ordered the department to pay the amount (Rs 2.8 lakh) deposited by the family at the time of opening the accounts, plus Rs 500 that they had deposited each year thereafter, along with interest as per the PPF rates, within 30 days. If the department fails to do so, it must pay another interest of 12% on the entire amount until the full payment is made.

The court also awarded Rs 25,000 in damages and Rs 10,000 as litigation charges.

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