Thank You for helping out.
We have already considered the above mentioned KB article along with the known password issue while upgrading, VMware Knowledge Base article 75195.
Actually, we had to open case with VMware and the issue got resolved. There was a problem in controller.properties file at /usr/lib/vmware-vcops/user/conf/controller.
There is a property in this file, "deleteNotExisting=", this property was commented in our 1 node cluster and its default value is false.
We had to uncomment it, set its value to "deleteNotExisting=false" and save the file. After saving it, we set the root/admin password to never expire and performed the upgrade again by removing all the impacted Management Packs (considered Impacted Management Pack list by running the Upgrade Assessment Tool). The upgrade went smoothly.
This particular property entry doesn't come under pre-check, it is supposed to be either true or false and not blank. This value is about removing the entry of a resource from vROPs that was already removed from vCenter earlier.
It seems this value was changed at some point of time earlier to blank and was causing the upgrade to fail. This value does not have any impact on the product.