The sub-divisional judicial magistrate at Balasore, about 220 km from here, granted the couple bail on the condition that they would not go outside the state without the court's permission, lawyer Gouri Kumar Barik told IANS.
Mohanty and his wife were arrested from Kolkata March 30. Their 28-year-old son Raja Shree Mohanty was arrested March 17 in the same case.
Raghunath Mohanty, 64, five-time legislator from Basta constituency in Balasore district, resigned from the state cabinet on March 15, a day after his daughter-in-law accused him of torturing her for dowry.
Mohanty was holding the portfolios of law, urban development and information technology.
In her complaint at a police station in Balasore, Barsa Swony Choudhury alleged that she had been physically and mentally tortured by her husband Raja Shree since their wedding in June 2012.
She also alleged that her father-in-law Raghunath, mother-in-law Pritilata, sister-in-law Rupashree and other family members were also involved in the crime.
She claimed that her parents had given Rs.10 lakh at the time of the marriage, as was demanded, but her husband and in-laws were unhappy. They insisted that her parents should pay Rs.25 lakh and also offer them a multi-utility vehicle.
Raja Shree's bail plea will come up for hearing Wednesday, Barik said.