Here's what solved the problem. This is not documented in adobe docs.
-Take a fresh backup on running 6.1 environment and perform the pre-upgrade maintenance tasks.
- Move the segmentstore from /repos folder and move it under /crx-quickstart/repository
- Navigate to /crx-quickstart/install folder and edit SegmentNodeStoreService config and remove the 'repository.home' parameter
- Copy 6.3 Jar along side /crx-quickstart
- Run the command to unpack, java -jar 6.3_quickstart.jar -unpack
- Backup and Remove …/crx-quickstart/logs
- Complete the migration by running command java -Xmx4096m -XX:MaxPermSize=2048m -jar aem-quickstart.jar -v -x crx2oak -xargs -- --load-profile segment-fds
- Monitor the logs
- Once completed, Login into the new 6.3 environment and do a quick round of smoke testing and sanity tests
- Shutdown the instance or now.
- Once ', Check the /crx-quickstart/install folder for the newly generated configs
- Move back the segmentstore and the blobids folder from the /crx-quickstart/repository folder to the /repos folder
- Edit 'org.apache.jackrabbit.oak.segment.SegmentNodeStoreService.cfg' and add repository.home=/Users/abc/Desktop/WorkArea/Instances/CIBC_repos (without the quotes) and Save. (Adjust the correct path per your systems)
- Start the instance and Voila the upgrade has been completed successfully.
Thanks to Kunwar from adobe day care team to help us on this.