The NGT told the Delhi Development Authority on Thursday to assess the damage and compute cost of restoration in line with the recommendations of the expert panel.
The bench said "in the event, the expenditure for that goal on the portion of the land forming part of Phase-II of the project of DDA is found to be in excess of Rs5 crore, DDA would be at liberty to recover the said amount and AoL shall be liable to pay the said amount on demand".
AoL's counsel said they would appeal the NGT verdict in the Supreme Court.
Environmentalists had vocally objected to organising the World Culture Festival on the ecologically fragile Yamuna banks - which included a 7-acre stage for 35,000 musicians and dancers, newly built dirt tracks and 650 portable toilets across 1,000 acres.
The NGT, however, refused to impose additional fine adding that the DDA should use the deposited amount to restore the floodplains and bill the AoL if the cost was more or return to it the balance if the cost was below that amount.
The green panel held that the Rs. 5 crore deposited by Art of Living as fine shall be utilised by the DDA for the restoration work.
The forum had imposed the fine as interim environmental compensation for the damage caused by the event and had declared that if the cost of restoration exceeded Rs 5 crore then the DDA would be entitled to recover the same from the foundation itself.
The NGT said it was beyond its jurisdiction to rule on whether the AoL festival should have been allowed on the floodplains. We do not agree with the verdict. Our submissions have not been dealt with/considered. We will appeal to the Hon'ble Supreme Court.
The Art of Living Foundation, in a statement, said: "We maintain that AOL has not caused any damage".
Earlier this year, a team of experts submitted a report to NGT saying last year's event along Yamuna floodplain had "completely destroyed" the riverbed.
It should have considered the request for permission in accordance with environmental laws in force, it said.
Before the pronouncement of the judgement, the NGT was informed that Justice R S Rathore, who had earlier heard the matter, had recused from the bench.
Stating that it was committed to work towards the good of the society, the AoL said it was confident of getting justice from the apex court.