The incident occurred in Govandi suburb, north-east Mumbai, around 3.30 am, when a 24-inch water mainline suddenly burst and thousands of litres of water gushed into Sanjivani building.
People sleeping on the ground floor of the building were caught unawares as water gushed into their homes at strong force.
While one person, Devi Hajare, 60, was drowned, eight others were suffocated and taken to local hospitals. One woman, identified as Sunanda Bhandare, is reported to be in a critical condition, said officials of the BMC disaster control room.
Water supply to the entire area, which was disconnected following the incident, was restored about six hours later.
Police and BMC officials are investigating the causes of the pipeline burst, including whether the building was authorised, and how it was permitted to be constructed in such close proximity to the water mainline.