Mrs. World Caroline Jurie was arrested after she forcibly removed the tiara off the head of newly-crowned Mrs. Sri Lanka Pushpika De Silva during the competition.
Caroline Jurie was arrested on Thursday while the competition was held on Sunday.
According to reports, De Silva suffered injuries when Jurie pulled off the crown from her head.
Police spokesman Ajith Rohana told BBC that Jurie along with model Chula Padmendra were arrested on charges of “simple hurt and criminal cause”.
Jurie and Padmendra were later released on bail.
Reports said they are expected to appear before court on April 19.
In a video of the crowning ceremony published by the Colombo Gazette, Jurie cited a rule of the pageant that prevents divorced women from winning the title.
“There is a rule that you have to be married and not divorced, so I am taking my first steps in saying that the crown goes to the first runner-up,” Jurie said during the event.
Jurie then took the crown from the winner, Mrs. Sri Lanka Pushpika De Silva’s head and placed it on the runner-up and De Silva had to walk off the stage.
De Silva in a Facebook post on Monday admitted that she was separated, but not divorced and said she had suffered “injuries” to her “skull” when Jurie had “snatched” her crown.
“So, even though that symbolic crown has been snatched from my head, I would like to inform you that I have already taken the necessary legal action for the injustice and insult that has taken place,” De Silva wrote in a statement translated from Sinhala.
After Jurie’s arrest, the chief organizer of Mrs Sri Lanka pageant, Chandimal Jayasinghe, said he, Jurie, Padmendra and De Silva recorded their statements at the Cinnamon Gardens police station.
Jayasinghe also told the BBC that De Silva was re-crowned and they expect Jurie to issue a formal apology.
“We are disappointed. It was a disgrace how Caroline Jurie behaved on the stage and the Mrs World organisation has already begun an investigation on the matter,” Jayasinghe said.
In another Facebook post on Tuesday, De Silva thanked pageant officials for their support after the incident.
“I do not hate anyone and I forgive those who do so to me at that moment,” De Silva wrote in Sinhala, adding, “Nothing can be won by hatred.”