MUMBAI: A dilapidated building collapsed outside Mumbai on Tuesday killing at least 12 people, the second such accident around the Indian financial capital in a week, a rescue official said.

Rescuers were searching through the rubble for any survivors after the three-storey structure crumbled overnight while families were sleeping inside, the official said.

"Twelve bodies have been recovered and seven people pulled out alive. Another one person is missing,” National Disaster Response Force official Alok Avasthy told AFP.

The building, which crumbled around 2:00 am local time, was situated in the Naupada area of Thane city near Mumbai.

"It was a 50-year-old structure that was in a dilapidated state and had been declared unsafe by the government two years back but people still lived there," Avasthy said.

"We pulled a family of five to safety with the help of a sniffer dog who tells us that there is still some life in there," he said.

The accident is the latest in a long line of deadly building collapses recently, some of which have highlighted poor construction standards.

It comes just a week after nine people were killed when another old three-storey building collapsed under heavy monsoon rains in the Mumbai suburb of Thakurli.

Read more: India building collapse kills seven

Millions in India live in dilapidated buildings, many of which cave in during the annual monsoon season. An 11-storey apartment tower being built in the southern state of Tamil Nadu came crashing down in July last year following heavy rain, killing 61 people, mostly labourers.

A booming economy and rising real estate prices have also often led unauthorised multi-storey structures to mushroom on the outskirts of cities and towns, some of which have collapsed.