Bagan's half-time decision to pull out of the match, which drew one lakh plus spectators at the Salt Lake Stadium, came after their player Syed Rahim Nabi suffered a head injury after being hit by a stone hurled from a gallery packed with Mohun Bagan supporters.
Nabi was admitted to a hospital where he needed multiple stitches.
Trouble started a little after East Bengal took a 1-0 lead through Harmanjot Kharbra in the 43rd minute.
Protesting against a foul given against his team, Bagan's Nigerian striker Odafa Okoli charged towards referee Vishnu Chauhan. The forward got marching orders after his aggression.
Syed Rahim Nabi being attended at the Salt Lake stadium
Things flared up and missiles rained from the galleries. A stone hit Nabi, who bled profusely from near his right eye.
Police chased away the miscreants and emptied a stand. The match resumed after a 13-minute halt.
40 people, including twenty policemen were injured in the scuffle, police sources said.
During the intermission, Bagan officials held a meeting and announced they would not play any further.
Bagan handed over a letter to the match commissioner citing players' safety and law and order issues, said All India Football Federation (AIFF) Chief Executive Officer Sundano Dhar.
"The match commissioner went out of his way to persuade Bagan to change their stand and even went to the club dressing room. But the club did not relent," said Dhar. The match had to be called off.
The violence then spread outside the stadium as Bagan officials burnt down some East Bengal flags. Police chased the mob.
Dhar later said a decision on the match would be taken based on the match commissioner's report and I-League regulations.
However, he did some tough talking against Bagan and spoke about withdrawing a club from the competition if it pulls out midway into a match.
"In such a case, all matches played by the errant club will be cancelled and considered null and void and goals scored or conceded by other clubs against the said outfit will not be considered.".
He also spoke about seeking compensation from the club and additional punitive measures.
An enraged Mohun Bagan finance secretary Debasish Dutta said Dhar had overstepped his brief.
"It was East Bengal's home match. It was for them to arrange for fool-proof security. The basic thing in a football ground is player's safety. Nabi's injury is very serious. How could we have continued when players' safety was not guaranteed?
"If the AIFF victimises us, we will move AFC and FIFA," he said.