The incident took place Jan 3 in block headquarters town of Updala, around 230 km from here, but came to light only after police registered a complaint against the legislator and one of his associates Monday evening.
"We have registered a case. Further investigation is on. The victim has been medically examined," sub-divisional police officer K.C. Nayak said.
Legislator and one of his associates confined victim to a room and raped her.
The woman, 38, alleged that Srinath Soren, who represents Udala constituency in the state assembly, had taken around Rs.1 lakh from her promising a job some months ago. But as the legislator failed to keep his promise, the woman demanded her money back.
After she made repeated requests, the legislator called her to his residence at Udala Jan 3 on the pretext of returning the money. Instead of returning the money, the legislator and one of his associates confined her to a room and allegedly raped her.
The woman claimed she somehow managed to escape when an unidentified person knocked on the door.
The woman said soon after the incident she went to a police station but police refused to register her complaint.
Police registered a case against the legislator and his associate Swarup Das only after the woman moved a court seeking justice.
The legislator said the allegation was false and his opponents have been using the woman to tarnish his image.
(With IANS inputs)