Stoppage of Two Increments Without Cumulative Effect
Stoppage of two increments without cumulative effect means the employee will not receive an annual increment for two years, i.e., they would lose their increments for 2017 and 2018. However, in 2019, they will receive the same increment added to their basic pay along with the increment due for 2019. This is only a temporary holding of the time scale increment. Had it been "stoppage of two increments with cumulative effect," they would never receive those two increments. In 2019, they would receive one increment, which is the increment due for 2017, losing the increments for 2018 and 2019.
Promotion and Retirement Considerations
In the present case, since the employee has been given a promotion (I am concerned about how an employee against whom disciplinary action has been taken is given a promotion), there are two possibilities. Upon promotion, whatever increment is payable to them will be paid only in 2019. Now, since they have retired from service, they should have retired with a basic pay of 2016. In the pensionable salary, this increment will also be on hold, but now the revised pension based on the basic pay of 2016 plus two increments will be released.
The above is not a conclusive answer because I am not familiar with government service rules and their regulations. Therefore, I invite others to share their comments on this issue.