Employees of the Municipal Corporation of Greater Mumbai, which owned the building, and their families were housed in the structure and had been asked to leave earlier this year.
A municipal spokesman did not explain why the families had been asked to leave or whether alternative accommodation had been arranged.
Local authorities said they would bear the cost of treating the injured and that compensation would be paid to families of the dead.
The cave-in was the latest in a string of building collapses in and around Mumbai in recent months, including one in April that killed 74 people.
The incidents have highlighted poor quality construction and violations of the building code, caused by massive demand for housing and endemic corruption.
The high cost of property in Mumbai and surrounding areas pushes many low-paid families, especially newly arrived migrants from other parts of India, into often illegal and badly built homes.
The situation is so dire that more than half of the city’s residents live in slums.
Falling buildings are a nationwide problem. British daily The Guardian gathered statistics showing that 2,651 people were killed across India in 2012 from the collapse of 2,737 structures, including houses and bridges.
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