A special court for Prevention of Money Laundering Act (PMLA) cases is hearing the Enforcement Directorate's (ED) plea to declare Mallya a fugitive under the Fugitive Economic Offenders (FEO) Act.
Arguing before judge M S Azmi, Mallya's lawyer Amit Desai said his client is a non-resident Indian (NRI) with a permanent address in London and he had substantial business overseas as well as in India.
Advocate Desai, while opposing the ED plea, said that Mallya had cooperated with the Debts Recovery Tribunal in its proceedings in relation to the loans given to his firms.
He left the country for London on March 2, 2016 via Germany, where he attended a conference of World Motorsports as a director, Desai said. Mallya was then one of the owners Force India, a Formula One team, he added.
The investigating agencies had claimed that he left the county under suspicious circumstances.
Desai, however, argued that "Mallya left the country in normal course and before any case was registered against him."
Further, FEO Act is a draconian law as it permits confiscation of a person's property even before the trial starts, he said.
"As per the criminal procedure, property is confiscated only after the accused is held guilty. Under this law, the question of confiscation of property comes even before the first witness is examined," he said.
ED counsel D P Singh rebutted Mallya's defence that he cannot return to India because of the conditions of the bail granted by a court in the United Kingdom which restrain him from leaving the country.
Mallya can give an undertaking before the UK court that he wants to return to India, Singh said.
The arguments will continue on Friday.