London: Liquor baron Vijay Mallya, wanted in India for defaulting on over Rs 8000 crore ($ 1.4 billion) in bank loans, was arrested on Tuesday. Within three hours, a court granted him bail.
Metropolitan Police said Mallya, 61, was taken into custody after arriving at a central London police station.
The Westminster Magistrates' Court later gave him bail on a 650000 pound (Rs 5.3 crore) bond. The next hearing of the case will be on May 17.
A Metropolitan Police statement said officers from the Extradition Unit arrested Mallya on an extradition warrant from India.
"Mallya was arrested on behalf of the Indian authorities in relation to accusations of fraud," the statement said.
After getting bail, Mallya tweeted: "Usual Indian media hype. Extradition hearing in court started today as expected."
Mallya fled to Britain in March 2016 after being pursued in courts by Indian banks seeking to recover Rs 8191 crore owed by his now defunct Kingfisher Airline.
The banks had been able to recover only Rs 155 crore. Despite multiple injunctions, Mallya failed to appear before investigators - and then flew out of India.
India had asked Britain to extradite Mallya to face trial after the liquor and aviation tycoon fled there in March 2016 after banks sued to recover about $1.4 billion that Indian authorities say Kingfisher owes.
Mallya has repeatedly dismissed the charges against him and defended himself in messages from his personal Twitter account. On January 28 he said that "not one rupee was misused".
India and Britain have a mixed record on extradition, say legal experts. Some cases have collapsed when evidence against the defendant fell short of the standard of "dual criminality", or actions that amount to a crime in both countries.
"The court usually focuses on whether there is sufficient criminality to extradite someone," said Andrew Smith, a partner at London law firm Corker Binning. "India needs to show a prima facie evidential case against this man."
The criminal case against Mallya was only filed this year. If his legal team argues persuasively that the charges were filed as an act of revenge, that might sway the court in his favour, legal experts say.
Mallya co-owns the Force India Formula One team. He has a base in London as well as a country home bought from the father of triple Formula One world champion Lewis Hamilton.