"Nine people are dead including a woman and a child".
Three people jumped from the blazing structure even as 25 fire tenders rushed to the spot after receiving a call at 4.30 am.
A large wedding party had booked out most of the hotel, and most of the victims were sleeping when the fire began.
The fire department will conduct an inquiry into the incident and the Delhi Police has also lodged an FIR against the hotel administration and will further investigate the negligence caused on their part.
Footage showed flames leaping from the top floor. While 13 bodies were shifted to Ram Manohar Lohia (RML) hospital, the remaining four were taken to Lady Hardinge Medical College and BLK Hospital. "There was wood panelling on the corridor because of which people couldn't use corridors to evacuate; two had jumped off the building".
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Karol Bagh, in central Delhi, is popular with tourists and lined with hotels and markets.
Fire accidents are not uncommon in Indian cities, where builders often flout safety regulations.
Last week, a fire broke out in a hospital in Noida, forcing an emergency evacuation of scores of patients and other people.
Building regulations and fire safety measures are routinely flouted by builders and incidents of fires are reported nearly every week from across the country.
"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.
Authorities appeared to have been negligent in enforcing building laws in the surrounding area, Delhi's urban development minister Satyendar Jain said.