LONDON — Vijay Mallya has spent a lifetime building a reputation as India’s professed King of Good Times, a flamboyant tycoon with investments in alcohol, an airline and an auto racing team. But his freewheeling, free-spending ways ended last year when he fled India under an avalanche of unpaid bills and accusations of fraud.
Mr. Mallya capped a stunning fall from grace on Tuesday, when the British police arrested him as part of proceedings that could lead to his extradition to India.
Mr. Mallya came to symbolize many of the heights, and excesses, of Indian business in the decades of economic growth that followed the country’s deregulation in the early 1990s. But he eventually became a target of the authorities, partly because his public displays of wealth came even as his company fell behind on salary payments to staff.
Often likened to the British entrepreneur Richard Branson, Mr. Mallya, 61, turned what had been a family brewing business into a sprawling conglomerate. He now owns the United Breweries Group, which makes Kingfisher beer and distributes a wide variety of products, including alcohol, chemicals and fertilizer. He also has a stake in India’s only Formula One car racing team, Force India.
He was a frequent presence on the party scene, drawing attention in particular for a birthday party a decade ago that featured Lionel Richie as the headline act. Attendees at Mr. Mallya’s 60th birthday party, held at his villa in the coastal Indian state of Goa, included the singer Enrique Iglesias, Bollywood stars and top Indian businessmen.
“I work hard, and I play hard, too,” Mr. Mallya once said.
But his outsize ambitions proved to be his downfall.
In 2003, Mr. Mallya established an airline, with plans to expand internationally and shift from an all-economy-class model to add a luxurious business class. He made a splash at the Paris Air Show in 2007 with a $7 billion order for 50 Airbus planes.
The airline promised meals even on short-haul flights, and curbside valets. Its flight attendants wore the bright red uniforms used by staff members on Mr. Branson’s Virgin Atlantic.
But Kingfisher Airlines struggled in a competitive domestic market. Over time, it was left with a ragtag collection of aging and inefficient planes. By 2012, after persuading lenders to restructure its debt, it ceased operations in the face of high fuel prices and a global slowdown.
The airline owed more than $1 billion in loans, as well as other bills, including back pay to former employees. Because Mr. Mallya himself, and the United Breweries Group, had backed some of the loans, creditors chased them for repayment.
As the dispute went through the courts, banks tried to seize Mr. Mallya’s assets. Indian authorities raided his homes and offices in Mumbai, Bangalore and Goa in 2015.
He left for Britain in March 2016, but India canceled his passport the next month, after a court in Mumbai issued a warrant for his arrest. India sent Britain an official request for Mr. Mallya’s extradition on Feb. 8.
On Tuesday, the Metropolitan Police in London said its extradition unit had arrested Mr. Mallya “on behalf of the Indian authorities in relation to accusations of fraud.”
Mr. Mallya appeared at a London court and was then released on bail, according to Dinesh K. Patnaik, India’s deputy high commissioner in London. Mr. Mallya is scheduled to appear for another hearing next month.
“The willingness of the U.K. government in bringing him to justice is something we are appreciative of,” Mr. Patnaik said.
According to the British Home Office, arrest warrants are issued in response to extradition requests only if such requests are certified by officials and then sent to a court for the warrant to be issued.
If the judge in Mr. Mallya’s extradition hearing approves the request for him to be sent back to India, then it is sent to Britain’s home secretary for final approval.
Mr. Mallya dismissed the news as “media hype,” but he confirmed on Twitter that an extradition hearing began on Tuesday.
He has previously disputed accusations that he fled India to avoid bad debts, saying on Twitter that he travels “to and from India frequently.”
“I did not flee from India and neither am I an absconder,” he added. “Rubbish.”
Santosh Kumar Gangwar, an Indian finance minister, told reporters that the country’s authorities were “ascertaining the facts” about Mr. Mallya and “trying to find out how to bring him back to our country and start legal proceedings against him.”
“We will not spare him legally,” Mr. Gangwar said.
Correction: April 18, 2017
An earlier version of this article misstated the year that Kingfisher Airlines was founded. It was established in 2005, not after the 2008 global financial crisis.