A BBC report quoting local officials stated that 35 people were rescued.
The blaze broke out in the wee hours on Tuesday.
"The fire has been doused", Deputy Chief Fire Officer Sunil Choudhary said earlier "The bodies are being taken out now".
Reportedly, the reason behind the fire was the short circuit on the 4th floor of the hotel.
A video taken at the scene shows a guest jumping from a window to avoid being consumed by the inferno.
Authorities in Delhi have frequently launched raids to enforce building codes, fire safety measures and evacuation procedures but these steps have failed to check rampant violations by builders in a rapidly expanding capital city of more than 18 million people.
"There was a wooden paneling on the corridor because of which people were not able to use corridors to evacuate, therefore two people jumped off the building", Vipin Kental, a fire official said, ANI reported.
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Like this story? Share it with a friend! Most people jumped out of the upper floors of the hotel to save their lives.
Some 100 firefighters and 25 fire engines responded to the fire, which engulfed all but the ground floor of the hotel, fire officer Vijay Paul said.
Hotel Arpit Palace is located in Karol Bagh, an area popular with tourists for its budget hotels and shopping.
Mr Jain said hotel guests tried to flee through the hotel's narrow corridors, panelled in wood.
Chand said rescue efforts were delayed because the first fire trucks arrived with manual ladders that weren't tall enough to reach his floor.
We will come out with it by today, and fix the responsibility on the hotel owners if there was any laxity on their part, " he added.