The death of the 55-year-old man, Sunil Perera, has sparked widespread public outrage in the tropical island nation.
Police arrested Perera on suspicion of carrying out the school bomb hoax after the principal misread the telephone phone number on his phone caller identification system, a court was told.
A judge cleared Perera of any wrongdoing on July 4 after he had been locked up for five days.
When he was taken before the magistrate, he could not walk and had to be helped by prison guards.
The judge immediately ordered that the man be rushed to a hospital in the capital Colombo, but he died of internal injuries last Thursday.
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The Commissioner General of Prisons, Vajira Wijegunawardena, said Saturday that two guards who allegedly beat the man while he was in custody had been suspended pending the outcome of the police investigation.
"I have already ordered the suspension of the two guards and strict action will be taken against them," Wijegunawardena said.
The Daily Mirror