Ppf for smaller huf

Mr X had made a partial partition of his HUF in the year 1979 and created another smaller HUF consisting of himself and his wife.  He is the karta of both the HUFs. Since then he has been filing separate returns for the original HUF and the smaller HUF under separate PAN.   He has also been contributing under PPF under both the HUFs and was getting interest credited on the invested amount.  Now, the Post Office says that the PPF account for the smaller HUF is invalid since one HUF could have only one PPF account opened in his name.  It further says that the principal amount paid can be withdrawn but no interest will be paid from the beginning on the second account.   Mr X argues that both the HUFs are separate entities with separate PAN and different constitution. 

My query is:  Whether the PO is right in denying the interest on the smaller HUF account from the beginning?  Is there any clarification from any authority ?  Please help.