The Act of Settlement, 1781 – Salient Features


The Act of Settlement 1781 was passed by the British Parliament on 5th July 1781 to remove the defects of Regulating Act of 1773. The key provision of this Act was to demarcate the relations between the Supreme Court and the Governor General in Council. This Act is popularly known as “ The Amending Act of 1781” or “Declaratory Act of 1781”.

The basic and fundamental aim of this Act was to establish a new system of Courts to remove the grievances against the Supreme Court and the failure of the Regulating Act’s aim of controlling administration through Judiciary.


The conflict between the Supreme Court and Supreme Council reached its apex during 1779-1780. Then , the Supreme Council filed a petition  against the improper working of supreme court in Bengal. Similar petition was filed by various zamindars , company’s servants and so on. The Parliament , therefore , appointed a Committee (Touchet) to enquire into this matter and report as quickly as possible. Then the Committee submitted its report and as a result the Parliament passed the Act of Settlement in 1781.

Reasons for passing of Act of Settlement 1781:-

  • Though the Regulating Act of 1773 , brought a major change in the Government’s system , but there were certain loopholes which this act failed to achieve. Those loopholes were further fulfilled by the “Act of Settlement 1781”
  • Some issues arose with the Administration of Warren Hastings , which led to a lot of discontent and criticisms amongst people. Some of the examples of such issues are :- Patna Case , Cossijurah Case , Nand Kumar Case and so on.
  • There was a huge rift between the Supreme Court and Governor-General in Council which imbalanced the Administration to a certain extent.
  • Agitation by the people since there was an interference by the Government in personal laws of the communities.

Aim of the Act of Settlement 1781:-

  • To indemnify the Governor-General and the Officers of the Council who acted under their orders in undue resistance made to the process of the Supreme Court.
  • To remove the doubts and difficulties of the Regulating Act and the Charter which basically created divisions between the Government and Court.
  • To provide assistance to the Government of Bengal , Bihar and Orissa so that the revenue can be collected with certainty at any point of time.
  • To protect the Rights , Usages , and Privileges of the Indigenous people.

Features of the Act of Settlement 1781

  • The Governor-General and Council were exempted from the Jurisdiction of the Supreme Court for the acts done in official way.
  • It excluded the matters related to revenue from the Jurisdiction of the Supreme Court.
  • It even exempted the servants of the company from the Jurisdiction of the Supreme Court for their Official actions.
  • It provided that the Supreme Court should have the Jurisdiction over all the Inhabitants. It also asked the Court to administer the personal law of the “Defendants”.
  • It laid down that the appeals from the Provincial Courts could be taken to the Governor-General-In Council but not to the Supreme Court.
  • It basically empowered the Governor-General-In-Council to frame Rules and Regulations for the Provincial Courts and Councils.

The above saying proves , that the “Act of settlement 1781” was the  first attempt in India towards the Separation of the Executive from the Judiciary by defining the respective areas of Jurisdiction.

The “Act of Settlement 1781” tried to reconcile the differences and misunderstandings between the Supreme Court and Supreme Council to ensure the harmony in the working of these two vital organs of the Government System. So now let’s look at some more provisions of this act.

They are as follows :-

  • This Act provided that the Governor-General and Council were completely immune from the Jurisdiction of the Supreme Court for the orders passed or Act done by them in public.
  • The Supreme Court had no Jurisdiction in the matters concerning the collection of revenue.
  • The Jurisdiction of the “Supreme Court” was precisely defined in this Act. Section 9 of the Act of Settlement provided that the person who had any interest or control over lands and rents into the provinces of Bengal , Bihar and Orissa were immune from the Jurisdiction of the Supreme Court.
  • This Act provided that the person who were employed in company or under the Governor General were excluded from the Jurisdiction of the Supreme Court in matters relating to Inheritance , Succession , Contracts except wrong Trespasses.
  • This Act provided that no action can be taken against any Judicial Officer in the Supreme Court for any act done by him/her in exercise of his/her Judicial functions.
  • The British Parliament for the very first time gave recognition to the Civil and Criminal Jurisdiction of the Provincial Courts which were Independently existing. (Under this Act)
  • This Act specified that the Civil and Religious Usages of the Natives and their Ancient Rites must be Protected , Preserved and Safeguarded.
  • The framing of Rules and Regulations for conducting Civil Suits and Criminal Trials were only possible due to this Act , since it empowered the Governor-General and the Council for the same.

Landmark case :-

In Bampton V. Petumber Mullick Case , the dispute arose regarding the Jurisdiction of the Supreme Court over Indians regarding a part of land which was partly situated in Calcutta and partly outside it. “Section 17” of the Act of Settlement explicitly provides that the Supreme Court shall have Jurisdiction over all the Indigenous people of Calcutta.

Later it was found that the Supreme Court shall have the power and Jurisdiction over the Indigenous people of Calcutta but their cases relating to Inheritance , Succession , Rent , Goods and so on shall be decided with their Personal law i.e Hindu law for Hindus and Mohammedan law for Muslims.

Though this Act benefitted a large section of the people but still there were certain impacts of it on the society.

  • This Act completely favoured the Council and gave them a Superior authority over the Judiciary.
  • The Executives were strongly Strengthened to ensure that the Britishers were able to maintain their hold on the Indian Empire.
  • It was the very first attempt to basically Separate Executive branch of Government from Judiciary.

Though this Act failed to remove the flaws of the Regulating Act of  1773 but it proved to be of a great support in bringing the changes to the system of the Administration and Justice.

Author: Shreya Kaul,

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