I have two websites hosted on the same amazon server which are developed in magento. Initially both worked fine but for sometime both these website don't let me upload product images, don't let me login both frontend and backend until I remove some files from cache or somewhere. When I checked the server already had 62 GB of free space. Could anyone suggest me how to fix this issue? Your help would be appreciated. Thanks.
Assuming you mean disk space rather than memory as the title suggests, you may well have exhausted your hard disks inode usage which will result in the same issues as if the disk capacity is exhausted (deleting files will free up inodes).
The normal culprit for this is an ever increasing number of small session files under the
var/session/ folder. If you aren't already using PHP garbage collection to manage your sessions you should definitely enable it - this will manage the total number of session files, deleting old files once the session duration you specify has expired.