Other issues, like the ongoing American Revolution, made it difficult for Parliament to carefully address the issues in Bengal. Parliament did not have the time or the knowledge to carefully manage the unprecedented situation of a corporation ruling a sophisticated and culturally complex territory. Hastings had sent detailed descriptions of the contentious cases to London pleading for intervention. Parliament had to pass judgment on printed evidence that portrayed the Supreme Court as a despotic institution using “all the terrors and all the errors of the English Law” to harm the people. Eventually decisions were made in Hastings' favor.
Parliament summoned and heard evidence from men who had returned from India, including former members of the provincial councils. The result was the variously named "Act of Settlement," "Amending Act," "Declaratory Act" or "Bengal Judicature Act," (21 Geo III c. 70). This act curtailed the Supreme Court’s jurisdiction, restricting it to residents of Calcutta and British subjects in Bengal only. The act specified that zamindars were outside of the court’s jurisdiction and actions could no longer be served against them. It diminished the Supreme Court’s authority and increased the jurisdiction of Impey’s Sadr Diwani Adalat. The act arrived in Calcutta in June 1782 and the Court immediately began throwing cases out. “There is very little Business in the Court,” Hyde noted on June 23. Hyde did not see the act, and had to trust Impey as to its contents, another example of the lack of communication between London and Bengal. The Supreme Council’s show of force in the Kashijora case became law and the power of the Supreme Court had been checked.
Yet, even while Impey was throwing cases out of court, his recall was under way. By 1782, the Company’s Directors had learned of the appointments of Impey and Chambers to the additional judicial posts (see Hyde's Shorthand for more information). In May, the House of Commons voted to recall Impey to answer questions about the Sadr Diwani Adalat. Impey received notice of the recall in October but did not sail for England until December 1783. The wheels of justice ground slowly in England. Impey did not face impeachment proceedings until the beginning of 1787. He kept his official appointment as Chief Justice until his impeachment, after which he attempted to be reinstated and failed. Chambers was never censured, but he was not appointed, as expected, to Chief Justice until 1791, years after Impey’s resignation. Hastings saw the writing on the wall and left Calcutta in 1785. He, too, was impeached in a grueling seven-year trial. Although they were both acquitted, they had lost their positions of power over others.
Supreme Court business temporarily slowed after the Bengal Judicature Act, but the court found a work-around: if both sides agreed to be heard by the court in civil matters, it had jurisdiction. Soon Hyde was as busy as ever and Sir William Jones, replacing Lemaistre on the bench in 1783, joined him. After these early tumultuous years, Hyde had little need to hide his thoughts in shorthand and the court began to function with regularity. Impey and Hastings were out of the way and Sir Robert Chambers stepped up to the bench.