Civilians in India's Jammu-Kashmir state often accuse security forces of harassment.
Soldiers and police have been arrested in the past and accused of faking gun battles, then trying to claim government rewards by passing off those killed as wanted men. However, no soldier has ever been convicted.
An inquiry into the incident was launched after public outcry, which also forced police to probe four similar killings.
Protests then erupted on Friday in Sumbal, near Kashmir's main city of Srinagar, where Padder, a father of five, was buried in December. His body was exhumed on Thursday as part of the investigation into his death.
|"We have strong enough evidence against Parihar and Ram and will be shortly be presenting their case before a court"|
Farooq Ahmed, Jammu-Kashmir police official
Police fired teargas shells to disperse the protesters as nearly 3,000 people chanted: "We want freedom" and "Down with Indian security forces".
Protesters carried one of the exhumed bodies in a procession from the rural cemetery to Ajas village, 45km northeast of Srinagar, before handing it over to his relatives for burial, Ahmed said.
Ahmed said the two officers arrested Saturday have been charged with staging gun fights in which they killed civilians and falsely claimed they were militants from India's neighbouring rival, Pakistan.
Both countries claim all of the Himalayan Kashmir territory, which is split between them. Separatists have been fighting since 1989 for independence for the region controlled predominantly by India, or for its merger with Pakistan.
More than 68,000 people, mostly civilians, have been killed in the conflict.
The exhumation of three bodies in the past few days, and the continuing investigation that led to it, are rare in Jammu-Kashmir.