No one was injured in the incident, they said.
The blaze started on the ground-floor of the building at around 7.10 AM and three fire-engines were rushed to the spot.
The flames were brought under control within an hour, Begumpet Police Station Inspector G Baswa Reddy said.
"There were no casualties or injuries to anyone," he said.
Another police officer supervising the fire extinguishing operation on the scene said the blaze is suspected to have been caused due to a short-circuit.
"Three months ago also a similar incident had been reported where fire had broken out on the third-floor of the building," the officer said.