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\begin{array}{l}\phantom{16)}\phantom{1}\\16\overline{)63}\\\end{array}
Use the 1^{st} digit 6 from dividend 63
\begin{array}{l}\phantom{16)}0\phantom{2}\\16\overline{)63}\\\end{array}
Since 6 is less than 16, use the next digit 3 from dividend 63 and add 0 to the quotient
\begin{array}{l}\phantom{16)}0\phantom{3}\\16\overline{)63}\\\end{array}
Use the 2^{nd} digit 3 from dividend 63
\begin{array}{l}\phantom{16)}03\phantom{4}\\16\overline{)63}\\\phantom{16)}\underline{\phantom{}48\phantom{}}\\\phantom{16)}15\\\end{array}
Find closest multiple of 16 to 63. We see that 3 \times 16 = 48 is the nearest. Now subtract 48 from 63 to get reminder 15. Add 3 to quotient.
\text{Quotient: }3 \text{Reminder: }15
Since 15 is less than 16, stop the division. The reminder is 15. The topmost line 03 is the quotient. Remove all zeros at the start of the quotient to get the actual quotient 3.