Which act is known as the Act of Settlement?

The Declaratory Act, 1781 is known as the Act of Settlement. The purpose of the act was to remove ambiguity regarding the provisions of the Regulating Act.

The Act of settlement was also implemented to ensure smooth collection of revenue in Bengal, Bihar and Orissa. 

For further reading check the following articles:

• India’s Struggle for Independence
• Legislations in British India