The arrest of the Indian liquor baron Vijay Mallya in London by Scotland Yard on Tuesday made waves in top government and political circles here, with the Narendra Modi government highlighting that the fugitive tycoon was arrested on India's request to the UK authorities for his extradition on fraud charges. A proclaimed offender, Mallya was released on bail a few hours after his arrest.

"Legal process in this regard is under way in the UK. The two governments are in touch in this context," the MEA spokesperson said in response to a query on the issue.

India had given a formal request to the UK for Mallya's extradition through a note verbale on 8 February in accordance with the Extradition Treaty between the countries.

Mallya, whose now-defunct Kingfisher Airlines owes over Rs 9,000 crore loans to a slew of banks, fled India on 2 March 2016. The Indian Government has since revoked his Indian passport. He, however, has rejected all allegations against him.

In January this year, a CBI court had issued a non-bailable warrant against Mallya in the Rs 720-crore IDBI Bank loan default case. Earlier that month, the Debt Recovery Tribunal in Bengaluru had passed orders in favour of a SBI-led consrotium of banks to recover over Rs 9,000 loans from the Kingfisher Airlines.

Mallya's arrest came weeks after Union Finance Minister Arun Jaitley took up the matter of his extradition with the UK Chancellor Philip Hammond during his recent visit to London. 

The Modi government is now "assessing" how to bring Mallya back to India and start judicial proceedings against him, Union Minister of State for Finance Santosh Gangwar reportedly said. He said the government would leave no stone unturned to bring to justice anyone involved in financial irregularities.

A top government source said Mallya's arrest was in connection with his IDBI loan default case, asserting that the extradition process against him has now begun.  

"India needs to set precendents, the myth of crossing the boundaries and being out of bounds should be shattered. In Mallya's case, the overwhelming public opinion is that such people should be taught a lesson," the source said, adding "tax havens around the world are increasingly becoming less safe for wrong-doers".

The principal Opposition Congress, however, accused the Modi government of "hoodwinking" the people of India over Mallya's arrest, asking it to spell out a timeline for recovering his loans and for bringing him back to face the Indian courts.

The Congress asked why the Modi government sought Mallya's extradition and not deportation which, it claimed, would have ensured his immediate custody for India.

Claiming that the Congress's "relentless campaign" led to Mallya's temporary detention, the party's chief spkesman Randeep Surjewala questioned how could he be released simultaneously. 

Accusing the Modi dispensation of allegedly letting Mallya escape from India, Mr Surjewala asked PM Modi and FM Jaitley to tell the people of the country when Mallya and another fugitive based in London, Lalit Modi, could be brought to face justice in India.