I just can't believe myself , I tried all the normal options like resetting and Icloud signout and all as stated in the thread but nothing worked.
Then as other said , I thought of trying the most weird option of chaanging location and language to the one you are not currently in --> I changed my Language to Portuguese and Location to Afghanistan --> BOOMMMMMMMMMMM ---> It worked and started downloading the latest updates....
I would recommend below steps -
1 - Reset Apple Watch by holding for 30 Seconds and then erase all settings.
2- Sign Out from iCloud On your Phone.
3- Now start Apple Watch BUT Please dont Sign In into iCloud. Let it remain Signout.
4 - Now --> Change Language to Portuguese and Location to Afghanistan
5 - When it ask you to pair --> Click on Pair Manually.
and hopefully you will see that the update will start downloading :-)