Not able to upgrade to 7.6.2 on Watch Series 3. Update fails with error!

Hello there rajendra155,

We'd like to help get your watch up to date, so let's start with better understanding what's happening:

1. You mentioned it shows an error when trying to update your watch, but does it explain what's happening or what to do next?
2. Have you already tried a restart, or even making sure your paired iPhone has iOS 14.8 installed?
3. If you haven't tried any steps yet, let us know the results from taking the ones under the section 'If you need help updating' here: Update your Apple Watch

Take care!

FWIW, a lot of people have problems updating a series 3 watch due to insufficient memory. In some cases, unpairing the watch, completely erasing it, then pairing and restoring the backup will resolve the issue after an update. (Simply unpairing and pairing again may not work.)

Unpair and erase your Apple Watch - Apple Support

Also, see fireyjack's reply to:

Can't update her series 3 watch. - Apple Community

I also can’t update my Series 3 watch so now it can only show the time. Nothing else. My iPhoneX is updated. What to do?