The fire in the Uphaar hall on 13 June 1997 also wounded more than 100 people.
A court in 2007 had found Gopal Ansal and his brother Sushil guilty of causing death due to negligence.
The Supreme Court fined them 300m rupees ($4m;Â£3.5m) in November 2015, but India's main investigation agency appealed against the "lenient" verdict.
The judges gave Gopal Ansal four weeks to hand himself in to the authorities and go to prison.
India cinema owners found guilty
His brother Sushil Ansal will not be jailed because of his age, reports said.
Fire broke out in the Uphaar cinema hall of south Delhi while people were watching the Bollywood hit, Border, on 13 June 1997.
An inquiry concluded that if the gangway and doors to exit stairs at the venue had not been closed, the disaster would not have been so great.
Uphaar is trending on Twitter in India, with many criticising the decision.
The owner of a cinema hall in the Indian capital Delhi has been sentenced to one year in prison in connection with a fire which killed 59 people.