No one was injured in the incident. The blaze was brought under control in minutes.
A bonfire lit by some devotees to beat the cold could have spread to bushes at the foot of the Kailash hill, atop which several VIPs, sadhus and sants were staying in tents.
Shankaracharya of Jyotirmath Vasudevanand Saraswati was among those present.
"A major incident was averted. The flame was doused in minutes by six fire tenders, which had been brought from Surat for mela duty," said Fire Officer Gambhirdhan Barhat.
The incident occurred at around 0545 hrs when most of the devotees were sleeping. Announcements on the public address system to alert the fire brigade created panic among the people.