A senior Delhi police official said a team of eight workers were digging a basement at the site at approximately 9 am, when the loose soil piled up beside the site fell on four of them.
"While the four labourers were rescued from underneath the soil and rushed to hospital, one died of suffocation," he said.
The deceased has been identified as Subodh who had come to Delhi from Bhagalpur, Bihar, in search of job. He was married and had two children.
While police has registered a case of death cause due to negligence against the firm, which was developing the land, the labourers at the site protested against the company accusing it of maintaining poor safety standards.
Officials of the construction company at the site said the family of the deceased and those injured would be compensated.
Officials of the South Delhi Municipal Corporation also claimed that technical lapses in the accident will be thoroughly checked.