The restaurant was operating in a rented accommodation and the building owners got it vacated after a prolonged legal battle.
One of the oldest restaurants in the Queen of Hills, as Shimla was fondly called by the British, Baljees was started way back in 1954 by Chandra Baljee.
"We are closing our business from Thursday. The building will be handed over to its owners on July 15," restaurant owner Renu Baljee, 72, told .
She was handling the family business after her husband Harsh Baljee was murdered in 1996.
Nearly 70 employees would be laid off with the closure of the restaurant, which is located adjacent to the iconic British-era Town Hall building.
Shimla's famous outlet has seen many prominent customers Bharatiya Janata Party leader L.K. Advani, Narendra Modi, before becoming the Prime Minister, Bollywood actor Anupam Kher and former chief ministers Virbhadra Singh, Shanta Kumar and Prem Kumar Dhumal.
When he studied in India, former Afghan President Hamid Karzai was a frequent visitor too.
"I was the second generation to serve this restaurant. Seeing its closure is one of the most emotionally-oppressive experiences in my life," said employee Tirath Ram, who had been serving at the restaurant for over 20 years.
According to old-timers in Shimla, which was the summer capital of the British, Baljees is one of the popular restaurants among academic, legal, art and journalistic circles, besides tourists.
Octogenarian Mela Ram Sud too prefers this place not just to enjoy south Indian delicacies but also to meet old friends over endless cups of coffee.
"For decades Baljees was the only place where we meet a particular class of people to discuss and debate everything, from politics to national issues. We will definitely miss it," an emotional Sud said.
Its closure announcement came after a protracted legal battle spanning four decades.
The building owner Lok Nath & Sons and the restaurant owner Renu Baljee struck an out-of-court compromise in 2018 to vacate the premises within a year.
( With inputs from IANS )