What is the Act of Settlement 1781?

By BYJU'S Exam Prep

Updated on: November 9th, 2023

With the introduction of the Act of Settlement of 1781, the Regulating Act of 1773 was amended. The British Parliament passed the Amending Act of 1781, later known as the Act of Settlement 1781, with the intention of amending and correcting the mistakes in the Regulatory Act of 1773. The main reason for passing this Act was to establish a new court system that would deal with complaints against the Supreme Court.

Act of Settlement 1781

On July 5, 1781, the British Parliament passed the Act of Settlement to amend and correct the Regulatory Act of 1773. Today, it is also referred to as the Declaratory Act of 1781.

The following factors were taken into account when passing the law:

  • To look into the matters pertaining to the complaints directed towards the Supreme Court and to oversee the Regulatory Act’s failure to keep a check over the administration through the judiciary.
  • The relationship between the Supreme Court and the Governor-General of the Council.
  • The financial crisis faced by the East India Company in 1773 was one of the major reasons for the Act’s enactment.
  • The terrible famine that struck the people of Bengal, which resulted in their hardships, was also one of the reasons.
  • The exploitation of people by both the Nawabs and the East India Company.

Hence, to sum up, we can say that it was the purpose of the Act of Settlement of 1781 to mitigate the failure of the Regulatory Act of 1773.

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