It has now given him the last opportunity to appear before the court by December 18.
Chief Metropolitan Magistrate Deepak Shehrawat directed the Enforcement Directorate (ED) to take appropriate steps while initiating the process.
The court passed the order after ED's Special Public Prosecutor N K Matta informed it that the open-ended non- bailable warrant (NBW) issued earlier against Mr Mallya has been returned as unexecuted and the agency has no other option but to initiate the process under Section 82 and 83 of CrPC.
The agency is likely to take various steps, including publishing in newspapers regarding the matter. The court had on April 12 issued an open-ended NBW against the liquor baron.
An 'open-ended NBW' does not carry a time limit for execution unlike 'NBW'.
On November 4 last year, while issuing non-bailable warrant against Mr Mallya, the court had observed that he had no inclination to return and had scant regard for the law of the land.
It had said that coercive process has to be initiated against liquor baron Mr Mallya as he was facing proceedings in several cases and evading appearance in those matters.
The court had also held that Mr Mallya's plea, that he wanted to return to India but was "incapacitated" to travel as his passport had been revoked by Indian authorities, was "malafide" and "abuse of the process of law".
On July 9, the court had cancelled the exemption from personal appearance granted to Mr Mallya and directed him to appear before it on September 9.
The exemption from personal appearance to Mr Mallya was granted in December 2000 on ED's complaint for evading summons issued by it.
The agency had issued summons to the businessman in connection with alleged payment of USD 200,000 to a British firm for displaying Kingfisher logo in Formula One World Championships in London and some European countries in 1996, 1997 and 1998.
It had claimed that the money was allegedly paid without prior approval from the RBI in violation of FERA norms.
In its plea against Mr Mallya, ED had also sought issuance of non-bailable warrant against the Chairman of the defunct Kingfisher Airlines to secure his presence in the ongoing trial of the case, which is at the final stage.
According to ED, Mr Mallya was summoned on four occasions for questioning in connection with a contract signed in December 1995 with London-based firm Benetton Formula Ltd for promotion of the Kingfisher brand abroad.
When Mr Mallya failed to appear before ED in response to the summons, a complaint was filed on March 8, 2000 before a court here and later charges were framed against him under FERA.