The correct answer is option 3 - By amending Schedule 1 to the Constitution of India by exercising the amending power of the Parliament.

Option 1 states that the transfer was done by an agreement between the governments of India and Bangladesh. However, this is incorrect as the transfer was not done through a bilateral agreement.

Option 2 suggests that the transfer was done by a legislation passed by the Parliament amending Schedule 1 to the Constitution of India. While this seems plausible, it is not the correct procedure.

Option 4 states that the transfer was done by amending Schedule 1 to the Constitution of India by exercising the amending power of the Parliament and ratification by sixteen State Legislatures. Although this option would require ratification by the State Legislatures, which is not mentioned in the question, it is incorrect as the transfer was done solely through the amending power of the Parliament. Thus, option 4 can be eliminated.

Therefore, the correct answer is option 3, which correctly identifies that the transfer was done by amending Schedule 1 to the Constitution of India through the amending power of the Parliament.