"I hope the honourable judges will consider it favourably; everybody gets paid off and I guess that's the primary objective", said Mallya, who has been on bail on an extradition warrant since his arrest in April past year and is fighting extradition to India.
Jaitley, however, took to Facebook to dismiss Mallya's claims as being "factually false".
Recalling the occasion when Mallya "misused" his position as an MP, Jaitley wrote that the fraud accused had paced up to catch up with him when the FM was walking out of the House to go to his room.
Terming Mallya's offer to settle overdue loans of more than Rs 9,000 crore to his now-defunct Kingfisher Airlines as "bluff offers", Jaitley said he did not even take the papers the liquor baron was carrying during that brief encounter.
On being asked why the government and the banks are still on his case despite his settlement offer, Mallya put the ball in the banks' court. "Sometimes it seems the airline was not owned by Mallya, but by the Gandhi family in proxy", Patra said, adding that Rahul Gandhi, who himself is out on bail (in the National Herald case), had no right to question others on corruption. I said I happened to meet Mr Jaitley in Parliament and told him that I am leaving for London.
He did not do either of these and chose to recall the event only after Mallya's revelation appeared to have left him embarrassed.More news: George Papadopoulos says Jeff Sessions 'quite enthusiastic' about Trump-Putin summit
The question is how did Mallya leave the country in the first place.
Mallya's claim has whipped up a political storm in India, with the Congress party accusing Jaitley of providing a safe passage to Mallya.
After Mallya left the country, the State Bank of India approached both the Karnataka High Court as well as the Supreme Court about recovering their loans - neither of which had any power over Mallya, since he was now in England.
Mallya's defence team also rubbished the video of Barrack 12 at Arthur Road Jail in Mumbai, where the businessman is to be held if he was to be extradited to India, as having been freshly painted to give the perception of brightness that did not exist.
"I am a scapegoat".
Vijay Mallya arrives at Westminster Magistrates Court in London, Britain, September 12, 2018. "I hope the honourable judges will consider it favourably; everybody gets paid off and I guess that's the primary objective", said Mallya, who is fighting extradition to India on charges of fraud and money laundering amounting to around Rs 9,000 crores.