He was 73, said a media release.
Bahadur, who was an integral part of the strong Mafatlal SC line-up along with Shyam, Ratan and Ranjit Thapa, was suffering from a bout of jaundice and was admitted to the hospital, where he succumbed to the illness, it said.
Born in 1942 in Dehradun, Bahadur made international debut against Cambodia in the Asia Cup qualifiers in Cambodia in 1967 and went on to earn 22 India caps.
The mercurial winger, who mesmerised the crowd with his canny ball control and clinical finishing, scored the all-important match-winning goal in India's 1-0 win against Japan which secured the country a bronze medal at the 1970 Asian Games in Bangkok.
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It's the last medal won in football by the country in the continental multi-event sports extravaganza.
He also represented India in three editions of the Merdeka Cup and played in the Pesta Sukan Cup in 1970.
Initially, he was part of the triumphant Gorkha Brigade team, which won the Durand Cup in 1966 and two years later won the Rovers Cup with the Mafatlal SC.
In the Santosh Trophy national championships, he represented Services and Maharashtra, scoring eight goals (all for Maharashtra).
He holds the distinction of being the only player from Dehradun to be awarded Maharashtra's highest sporting honour, the Shiv Chhatrapati Shivaji Award, in 1973.