India’s environmental watchdog has fined a group led by a Hindu guru 50m rupees (£520,000) for constructing features that altered the topography and flow of a Delhi river before a cultural festival this weekend.

The National Green Tribunal ruled it would allow the Art of Living Foundation to hold the World Culture festival on payment of the fine, which the group’s leader refused.

Sri Sri Ravi Shankar, who founded the group in 1982, said he would challenge the order in an appeals court. “We have done nothing wrong. I will go to jail but not pay the fine,” he said, adding that the foundation would clean the riverbank after the festival.

The tribunal issued the verdict on Wednesday in response to petitions filed by environmentalists who say the roads, ramps and pontoon bridges could cause irreversible damage to the Yamuna floodplains.

Construction work gets under way on the banks of the Yamuna in New Delhi. Photograph: Money Sharma/AFP/Getty Images

The prime minister, Narendra Modi, is scheduled to inaugurate the festival on Friday, but the president’s office said Pranab Mukherjee would not attend the closing ceremony on Sunday. The festival is expected to be attended by millions and will showcase performances by thousands of musicians and dancers.

The river Yamuna is a tributary of the Ganges that swells during the monsoon. Hindus bathe in the river during religious festivals, but not many people swim there.

The Yamuna looks dark with a foul smell, and officials say it is tainted with sewage and industrial pollution. The water is chemically treated before being supplied to Delhi’s nearly 18 million residents as drinking water.

Art of Living organised a similar festival in Berlin in 2011.