Two persons were killed on Tuesday when eight houses, including six makeshift ones, collapsed and a slaughterhouse was buried under the debris following a landslide in Krishna Nagar locality here.
Uprooting of a large tree caused a landslip leading to the collapse of a cluster of houses with deafening noise, officials said.
Two bodies trapped under the rubble of the houses have been recovered, Shimla SP Sanjeev Kumar Gandhi told PTI.
Cracks had developed in some houses in the area in the morning following which most of the residents vacated them, the officials said.
At least two persons are feared trapped and possibility of more people under the debris cannot be ruled out, Shimla Deputy Commissioner Aditya Negi had earlier told PTI.
Videos of people in nearby houses screaming and telling the inmates to leave immediately were circulated on social media.
Heart-wrenching scenes of people calling for help and running for safety were witnessed at the site.
As the police, State Disaster Response Force and locals started rescue operations, several residents in the nearby houses ran out with their belongings.
Earlier, a woman who rushed to the spot said that her husband was trapped in the debris.
Atma Ram, an employee of the slaughterhouse, had said that his manager was feared trapped under the debris.
"When the slaughterhouse was being constructed, there were slides and some houses were vacated. Even after construction of retaining walls, there was seepage and the problem persisted," Amit, an eyewitness, told PTI.
He said that at least 15 families have been rendered homeless after the incident.
On Monday, two landslides took place in Shimla, one at a Shiva temple in Summer Hill and the other at Fagli, which claimed 17 lives.
Heavy rains have battered Himachal Pradesh since Sunday, triggering landslides and cloudbursts that blocked several roads and led to house collapse incidents.