This upgrade installs the host image along with the compatible Junos OS.
If you have important files in directories other than /config and /var, copy the files to a secure location before upgrading the device. The files under /config and /var (except /var/etc) are preserved after the VM host upgrade.
Finally was able to perform upgrade after upgrading each Routing engine separately with no-validate option.
Here are the steps
1) upgraded back up routing engine vmhost os.
2) upgraded primary Routing engine vmhost os
3) upgraded backup routing engine to 17.4 release.
4) upgraded primary routing engine to 17.r release
Thank you all for all your help !