As it stands, the fire has claimed lives of 17 people with nine injured and the toll could rise.
G.C. Misra, Delhi fire brigade director, said the blaze had been brought under control and that 35 people were rescued by firefighters in an operation lasting several hours.
The fire broke out at the Hotel Arpit Palace in a congested part of central Delhi, with images showing it engulfing the entire top floor.
He says authorities are still investigating what caused the fire.
Deputy Chief Fire Officer Sunil Choudhary told ANI, "The fire has been doused".
The inferno was reported in the early hours of Tuesday, with videos showing the top floors of the building consumed by flames.
Hotel Arpit Palace is located in Karol Bagh, an area popular with tourists for its budget hotels and shopping.More news: Revitalised Man Utd a different prospect for injury-hit PSG, admits Tuchel
The injured were taken to hospitals, but their medical conditions were not immediately known.
Fires are common across India because of poor safety standards and lax enforcement of regulations.
According to reports, 27 fire tenders have been pressed into action.
"As per information gathered from the site, it reveals that fire broke out in the second floor at around 3.30am on February 12 due to short-circuit", the official said. Seventeen people have died, a lot of them of suffocation. Thirteen bodies are at the RML Hospital, a senior doctor said.
Delhi Minister Satyendra Jain said, "According to building bylaws, buildings can not be over four-storeys (parking & four storeys) in this area".
More than 20 fire tenders were rushed to the spot and rescue operations were underway, it said.
Four people were killed in November previous year in a factory fire in Beadonpura area in Karol Bagh after a solvent used for laundering clothes spilt out on the floor accidentally.