Running the following command as root worked for me only temporary. As the real issue was with SELinux.

pm2 update

When I checked the systemd entry of pm2, I could see that the PID file could not be opened due to SELinux. So I had to create a new rule to allow SELinux to allow systemd to check if the PID file exists.

sudo cat /var/log/audit/audit.log | grep systemd | grep pm2  | audit2allow -M systemdpm2

Then I applied the new rule:

 sudo semodule -i systemdpm2.pp