The half-timbered Tudor style -- all-wooden frames and shingled eaves -- building currently houses the office of Project Deepak of the Border Roads Organisation (BRO), an inter-services organisation under the defence ministry.
The fire occurred in the top two floors of the three-storeyed building, a fire department official told IANS.
"Civil fire tenders were pressed into service," Deputy Commissioner Dinesh Malhotra told reporters.
The building, located in the vicinity of the Indian Institute of Advanced Studies, was constructed by the British, Raaja Bhasin, co-convener of the Himachal Pradesh chapter of Intach (Indian National Trust for Art and Cultural Heritage), told IANS.
"It's one of the British-era's iconic survival structures in Shimla. I am really saddened with the damage," Bhasin added.
This is the second major fire in the heritage building in Shimla in less than a year.
A devastating fire broke out in 109-year-old Gorton Castle, housing the state's Audit and Accountant General's officers, Jan 28 reducing two of its floors to ashes.