Sub-Divisional Judicial Magistrate (SDJM) Ranjan Kumar Sutar granted bail to the ex-Minister and his wife Pritilata on security of Rs 10,000 each and surety.
The SDJM had remanded them in judicial custody on March 30 after their arrest from Howrah district in neighbouring West Bengal by the Human Rights Protection Cell of Odisha police.
Mohanty's daughter-in-law Barsa Swony Choudhury had filed an FIR at Balasore Town Police station on March 14 accusing the former minister and four family members of physically and mentally torturing her for dowry.
Barsa alleged that the Mohanty family had demanded Rs 25 lakh and a luxury vehicle as dowry. Barsa, who had married the BJD leader's son Raja Shree in June last year, also accused her husband of having extra-marital relations.
A case had been registered against Mohanty, his wife, son, daughter Rupashree and son-in-law Subhendu Madhual under sections of IPC including 498(A) and Dowry Prohibition Act.
While Raja Shree was arrested from near Cuttack on March 17 and is now in jail custody, the former minister's daughter and son-in-law are still absconding.
As the issue triggered a major controversy and rocked the Odisha Assembly, ruling BJD leaders, who initially described the case as a family affair, had appealed to Mohanty to surrender.