In this paper, a new two stage S-ROD detection scheme that takes local motion compensation into account and a novel pixel based correction method that determines the new values of the blotched pixels from spatio-temporal correlation considering edge priority are proposed. For the blotch detection process, initially a pre-detection is done using S-ROD with a low detection threshold. Secondly, S-ROD detection that employs pixel based motion compensation is utilized over the pre-detected blotch candidates. The new values of the blotched pixels that are detected using the two stages S-ROD are determined from spatio-temporal correlation considering edge priority. Objective and visual detection and correction results show that the proposed techniques provide high performance.