The blaze, which started at 3:10 am local time, was reportedly caused by a short circuit in the main electric supply system. It rapidly burned the building down and the flames spread to nearby vehicles, Indian private broadcaster NDTV reports.
Five of the injured have been hospitalised in serious condition.
The building, which had one flat on each floor, had no fire safety equipment installed. Police detained its owner Ansar Patel and a case has been registered against him for causing death by negligence, according to NDTV.
Madhya Pradesh Chief Minister Shivraj Singh Chouhan offered his condolences to the family members of the victims and hoped for a speedy recovery of the injured.
"I pray to God to give place to the departed souls at his feet and give strength to the family members to bear this deep sorrow and to give speedy recovery to the injured," he tweeted, according to NDTV.