The blaze caught most guests in their sleep - with some of them trying to escape by breaking through the windows of their rooms.
Officials said hotel guests had tried to escape the fire through the hotel's narrow corridors, panelled in wood. Some were able to break through the windows of their rooms.
"Seventeen people are no more, they died because of suffocation, not fire," said deputy fire chief Virendra Singh.
He said: "When I got out of my room, I could hear 'help, help!' from adjoining rooms."
"In 15 minutes, the whole room was black".
The rescue took around 30 minutes as fire engine ladders could not initially reach Mr Chand's floor.
The hotel is located in Karol Bagh, an area full of shops and budget hotels that is popular with tourists in India's capital.
Delhi's urban development minister Satyendar Jain said authorities appeared to have been negligent in enforcing building laws in the surrounding area of the hotel.
"There is a clear case of negligence here," he said.
Mr Jain said that the hotel's fifth floor violated the law which limits construction to four floors.