"I left India because I had a scheduled meeting in Geneva. Before leaving I met the finance minister and offered to settle (the issue with the banks)," Mallya said, without naming the minister.
Mallya's claims invited a sharp reaction from Jaitley, who said the statement is "false". In a Facebook blog post, Jaitley wrote: "My attention has been drawn to a statement made to the media by Vijay Mallaya on having met me with an offer of settlement. The statement is factually false in as much as it does not reflect truth (sic)."
He added, "Since 2014, I have never given him any appointment to meet me and the question of his having met me does not arise. However, since he was a Member of Rajya Sabha and he occasionally attended the House, he misused that privilege on one occasion while I was walking out of the House to go to my room."
Jaitley further wrote: He paced up to catch up with me and while walking uttered a sentence that "I am making an offer of settlement”. Having been fully briefed about his earlier “bluff offers”, without allowing him to proceed with the conversation, I curtly told him “there was no point talking to me and he must make offers to his bankers.”
Soon after Mallya's claims, Congress spokesperson Randeep Singh Surjewala slammed the BJP in a tweet saying, "After Mallya reveals his ‘consultation meetings’ before his smooth escape, with Fiscal Mismanagement Blog Minister Sh Jaitley - one thing is clear - BJP is running “tour travels & immigration” agency for “loot scoot & settle abroad” brigade."
The Congress further demanded that the government must reveal details of Mallya's meetings with Jaitley while in a late night tweet, Congress chief Rahul Gandhi sought the finance minister's resignation and a thorough probe.
"Given Vijay Mallya’s extremely serious allegations in London today, the PM should immediately order an independent probe into the matter. Arun Jaitley should step down as FInance Minister while this probe is underway (sic)," wrote Gandhi. AAP chief Arvind Kejriwal took to Twitter to attack the BJP-led government saying, "PM Modi meets Neerav Modi before he flees the country. FM meets Vijay Mallya before he flees India. What transpired in these meetings? People want to know."
Arun Jaitley was the Finance Minister in 2016 when Mallya left India.
Mallya was appearing before the court for hearing in an extradition case, during which the judge was expected to review a video of the Mumbai jail cell prepared by the Indian authorities for the fugitive tycoon.
Before heading inside the court, Mallya told reporters that he had offered a “comprehensive” settlement. “I have made a comprehensive settlement offer before the Karnataka High Court in India and hope the honourable judges will consider it favourably. Everybody gets paid off and I guess that’s the primary objective,” he said.
The 62-year-old former Kingfisher Airline boss, who has been on bail on an extradition warrant since his arrest in April last year, is fighting extradition to India on charges of fraud and money laundering amounting to around Rs 9,000 crore.
At the previous hearing in July in the Westminster Magistrates' Court in, Judge Emma Arbuthnot had asked the Indian authorities to submit a "step by step video" of the Barrack 12 of Arthur Road Jail for "the avoidance of doubt" over the availability of natural light in the cell where the businessman is expected to be detained pre-trial, during trial and in the event he is convicted by the Indian courts.
The Crown Prosecution Service (CPS), arguing on behalf of the Indian government, had agreed to the request and the video has since been submitted to the court.
Mallya's defence team had demanded an inspection of the jail cell to ensure it meets the UK's human rights obligations related to extradition proceedings.
The CPS stressed that the Indian government had provided adequate material which rendered the need for an inspection unnecessary, leading to the demand for a video recording to be reviewed by the court.
The judge is also expected to hear the final closing arguments in the case, after which a timeline for her ruling is likely to become clearer.
The extradition trial, which opened at the London court on December 4 last year, is aimed at laying out a prima facie case of fraud against Mallya.
It also seeks to prove there are no "bars to extradition" and that the tycoon is assured a fair trial in India over his now-defunct Kingfisher Airlines' alleged default of over Rs 9,000 crores in loans from a consortium of Indian banks.
The CPS has argued that the evidence they have presented establishes "dishonesty" on the part of the businessman and that there are no bars to him being extradited from the UK to face Indian courts.
Mallya's defence team has deposed a series of expert witnesses to claim he had no "fraudulent" intentions and that he is unlikely to get a fair trial in India.