[Cites 27, Cited by 0]
Bombay High Court
Vinay Bansal vs Securities And Exchangge Board Of India ... on 1 December, 2025
Author: R.I. Chagla
Bench: R.I. Chagla
2025:BHC-OS:22935-DB
W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 31373 OF 2025
Hemant Kulshrestha ... Petitioner
V/s.
Securities and Exchange Board of India
(SEBI) and Ors. ... Respondents
WITH
WRIT PETITION (L) NO. 31301 OF 2025
Vinay Bansal ... Petitioner
V/s.
Securities and Exchange Board of India
(SEBI) and Anr. ... Respondents
____________________________________
Mr. Amit Desai, Mr. Venkatesh Dhond and Mr. Ashish Kamat, Senior
Advocates, a/w Mr. Gopal Krishna Shenoy, Mr. Aditya Mithe, Mr. Shashwat
Rai and Ms. Mrinali Dave i/b Keystone Partners for Petitioner in
WPL/31373/2025.
Mr. Navroz Seervai, Senior Advocate a/w Mr. Prasad Shenoy and Mr.
Chinmay Babhulkar i/b Mr. Akash Menon for Petitioner in WPL/31301/2025.
Mr. Shiraz Rustomjee, Senior Advocate a/w Mr. Prateek Pai, Mr. Ravishekhar
Pandey and Mr. Ankit Ujjwal i/b Agama Law Associates for Respondent No.1
in both Writ Petitions.
Mr. Darius Khambata, Mr. Gaurav Joshi - Senior Advocates a/w Ms. Shruthi
Sabharwal, Mr. Avinash Das, Mr. Anant Mishra, Mr. Ayan Tandon and Ms.
Prachi Gupta i/b Shardul Amarchand Mangaldas & Co. for Respondent No.2
in both Writ Petitions.
Mr. Janak Dwarkadas, Senior Advocate a/w Mr. Ravitej Chilumuri, Ms.
Aishwarya Singh and Ms. Sanya Gandhi i/b Khaitan & Co. for Respondent
Nos. 3 and 7 in WPL/31373/2025.
Page 1 of 51
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Order dated 1st December 2025
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
Mr. Ravi Kadam, Senior Advocate a/w Mr. Ravitej Chilumuri, Ms. Aishwarya
Singh and Ms. Sanya Gandhi i/b Khaitan & Co for Respondent Nos. 4, 5 and
6 in WPL/31373/2025.
___________________________________
CORAM : R.I. CHAGLA AND
FARHAN P. DUBASH, JJ.
RESERVED ON : 8TH OCTOBER 2025
PRONOUNCED ON : 1ST DECEMBER 2025
JUDGMENT (Per Farhan P. Dubash J.) :
CONTENTS
A. INTRODUCTION ..............................................................2
B. BRIEF BACKGROUND ........................................................5
C. SUBMISSIONS OF THE PETITIONER IN
WRIT PETITION (L) NO. 31373 OF 2025 ..................................7
D. SUBMISSIONS OF THE PETITIONER IN
WRIT PETITION (L) NO. 31301 OF 2025 .............................13
E. RESPONSE OF RESPONDENT NO. 1 - SEBI ..........................17
F. RESPONSE OF RESPONDENT NO. 2 - WEWORK INDIA ...........24
G. RESPONSE OF RESPONDENT NOS. 3 TO 7 (BRLMS) 2025......27
H. ANALYSIS AND FINDINGS ................................................27
INTRODUCTION
1. One of the main risks that a company coming out with an IPO
faces is whether such offering would find favour with the public and be fully
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
subscribed. However, in recent years, an additional risk has surfaced and
some IPO's are put to active judicial scrutiny of courts, like in the case before
us, where two Petitioners have come forward and raised somewhat similar
grievances to the IPO taken out by WeWork India. This order considers
whether their grievances are well founded and merit intervention from the
Court.
2. A perusal of the reliefs sought in both these Writ Petitions filed
on 30th September 2025 would reveal that, essentially, they seek to make a
complaint against the lack of proper disclosure in the Draft Red Herring
Prospectus (DRHP) and Red Herring Prospectus (RHP) for the Initial Public
Offering (IPO) of WeWork India Management Private Limited, (WeWork
India) Respondent No.2 in both Writ Petitions. They further seek a direction
against the Securities and Exchange Board of India (SEBI) Respondent No.1
therein to dispose of the complaints made by both the Petitioners in that
regard by passing a reasoned and speaking order. They also seek interim
reliefs that the proposed public issue and/or listing of securities of
Respondent No.2 on any recognized Stock Exchange in India be kept in
abeyance.
3. Since, there is commonality in the reliefs sought in both Writ
Petitions, with the consent of all parties, they were heard together and it was
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
agreed that they would also be disposed of by a common order.
4. At this stage itself, it would be necessary to point out that under
the IPO, the Bidding Date for Anchor Investors was 1 st October 2025 whereas
the Bid/Offer opened to Public/Investors on 3rd October 2025 and closed (to
all Investors) on 7th October 2025. Since both the Writ Petitions were filed
only on 30th September 2025 and considering the convenience of all the
advocates appearing therein, hearings were held on 1 st October 2025, 3rd
October 2025 and 8th October 2025. As a result, since the arguments came to
be concluded after the closure of the Offer Period, with the consent of all the
parties, it was decided that the Petitioners would not seek for the IPO and/or
the proposed Public Issue and/or listing of securities on the Stock Exchange
to be kept in abeyance, pending the final disposal of the present Writ
Petitions but would instead press the alternate interim relief that seeks an
order from this Court calling upon SEBI to direct WeWork India to amend the
Offer Documents - DRHP/RHP with such disclosures as would be considered
necessary by this Court. Moreover, considering the urgency in the matters,
all the parties agreed that the Respondents would be permitted to argue the
matter without filing any affidavit in reply but they would be entitled to rely
upon documents during the course of their arguments which has since been
done by filing a compilation of documents.
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
5. All the parties in both Writ Petitions were represented by Senior
Advocates of this Court. On the one hand, Mr. Venkatesh Dhond, Mr. Amit
Desai and Mr. Ashish Kamat, appeared on behalf of Hemant Kulshrestha, the
Petitioner in Writ Petition (L) No.31373 of 2025, whilst Mr. Navroz Seervai
appeared on behalf of Vinay Bansal, the Petitioner in Writ Petition (L)
No.31301 of 2025. On the other hand, Mr. Shiraz Rustomjee, appeared on
behalf of Respondent No.1 - SEBI whilst Mr. Darius Khambata and Mr.
Gaurav Joshi appeared on behalf of Respondent No.2 - WeWork India. In
Writ Petition (L) No.31373 of 2025, the Petitioner has also impleaded the
Book Running Leading Managers (BRLMs) of WeWork India's IPO, as
Respondent Nos. 3 to 7 therein. These BRLMs have not been impleaded in
the other Writ Petition (L) No. 31301 of 2025. Accordingly, Mr. Janak
Dwarkadas appeared on behalf of two of the said BRLMs viz. Respondent
Nos. 3 and 7 therein, whilst Mr. Ravi Kadam appeared on behalf of the other
three BRLMs viz. Respondent Nos. 4 to 6 therein.
BRIEF BACKGROUND
6. In order to properly appreciate the issues that arise for
consideration in both these Writ Petitions, it would be necessary to refer in
brief, to the factual backdrop, the details whereof are enumerated
hereinbelow:
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Hemant Vs. SEBI & Ors.
7. On or about 31st January 2025, WeWork India filed a DRHP with
SEBI for launching its IPO which was reported by various media agencies.
Thereafter, in or around March 2025, SEBI had placed the said IPO in
abeyance, which fact is stated to have come to the knowledge of the
Petitioners through various news reports. Subsequently, sometime in or
around July 2025, SEBI had removed the said IPO and the DRHP from its
abeyance list and an addendum to the DRHP also came to be issued on 18 th
August 2025. On 27th September 2025, it appears that the RHP was
published and filed before SEBI the next day.
8. During this period, Hemant Kulshrestha, the Petitioner in Writ
Petition (L) No.31373 of 2025 had filed a complaint/e-mail to the BRLMs,
with a copy marked to SEBI, complaining of various
non-disclosures/misleading disclosures made in the DRHP, which came to be
responded to by the said BRLMs on 27 th September 2025 interalia denying
the said allegations and confirming that all the disclosures therein were
made in compliance with the Issue of Capital and Disclosure Requirements
(ICDR) Regulations, 2018, the Companies Act, 2013 and all other applicable
laws. On the same date, WeWork India also responded to this
e-mail/complaint denying the allegations and statements made against it and
is stated to have issued a response, similar to that of the BRLMs. Since the
Petitioner was not satisfied with these responses, he addressed an e-mail
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Hemant Vs. SEBI & Ors.
dated 29th September 2025, this time around, to the independent Directors of
WeWork India with his grievances and also copied SEBI and the BRLMs on
the same.
9. On the other hand, Vinay Bansal, the Petitioner in Writ Petition
(L) No.31301 of 2025 appears to have been a little more diligent, inasmuch
as, he filed his complaint dated 20 th August 2025 on 25th August 2025 with
SEBI seeking return of the DRHP and withholding of the IPO, on account of
the various grievances raised by him therein which interalia included gross
mis-statements and material non-disclosures that were stated to be made
therein. By its letter dated 11 th September 2025, WeWork India is stated to
have responded to him and denied all the allegations made by him.
10. Under these circumstances, both Petitioners are aggrieved since
their complaints were not suitably redressed by SEBI, WeWork India and the
BRLMs, and which is stated to have constrained them to approach this Court
by invoking its extra-ordinary jurisdiction exercised under Article 226 of the
Constitution of India.
SUBMISSIONS OF THE PETITIONER IN WRIT PETITION (L) NO. 31373 OF 2025
11. Mr. Dhond has invited our attention to the DRHP and the RHP,
and in particular to Section VI thereof, which is stated to contain, " Legal and
Other Information". He submits that under Clause V thereunder, which
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Hemant Vs. SEBI & Ors.
relates to, 'Litigation involving the Promoters' and in particular, sub-clause
(A) thereof, which provides ' Details of the Litigation against the Promoters ',
not only is there misrepresentation of proper facts and details of the pending
litigation against the Promoters of WeWork India made therein but there is
also gross and deliberate suppression of information therefrom. Mr. Dhond
has painstakingly taken us through the said disclosures and submits that
though the same mention the filing of a chargesheet by the Central Bureau of
Investigation (CBI) against the Promoters of WeWork India, there is a
deliberate and selective mention therein, only to offenses under Sections
120(b) and 420 of the Indian Penal Code, 1860 (IPC), whilst the other and
more serious offenses, under Sections 409 and 477A of the IPC, which were
also made in the same chargesheet, have been conveniently omitted
therefrom. Mr. Dhond further submits that the disclosures also fail to clearly
reveal that besides this chargesheet filed by CBI, there is another chargesheet
which has been filed against the Promoter of WeWork India, in proceedings
initiated by the Enforcement Directorate (ED) under the Prevention of
Money Laundering Act, 2002 (PMLA).
12. Mr. Dhond has also invited our attention to Section II of the
DRHP and the RHP which sets out various ' Internal Risks' that are required
to be disclosed, and which, he submits, the public at large are required to
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Hemant Vs. SEBI & Ors.
take cognizance of whilst making an informed decision on whether to invest
their hard earned monies in and subscribe to the WeWork India IPO. In
particular, our attention was invited to the topics relating to: (i) proceedings
initiated by the ED against the Promoter and Chairman of WeWork India
under the PMLA and the effect of the possible adverse outcome therein, to its
business, reputation, financial condition and results of operation; (ii) no
proceeds from the Offer for Sale portion of the IPO would be received by
WeWork India; (iii) net losses/negative net-worth incurred by WeWork India
and the effect thereof, on its business; (iv) disruptions to the operation of
WeWork India or events that may result in adverse impact on the WeWork
Brand, which in turn could have adverse impact on its reputation, business,
results of operations and financial condition; (v) legal proceedings involving
WeWork India, its Promoters and Directors and the adverse impact that could
be faced, if there is any adverse outcome therein; (vi) details of complaints
made post the filing of the DRHP; and (vii) potential harm that could be
caused to the business of WeWork India, if it is unable to adequately protect
its intellectual property rights.
13. The sum and substance of the grievances made by Mr. Dhond is
that even though these disclosures are included, both in the DRHP and
thereafter in the RHP, the same are grossly inadequate inasmuch as, the same
do not reveal the true and correct picture since there are not only several
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Hemant Vs. SEBI & Ors.
mis-statements recorded therein, but there are also various omissions that
are material and ought to have been included therein. He submits that
despite his client's complaint highlighting these anomalies, neither SEBI nor
WeWork India nor the BRLMs, (all of whom he submits, ought to have
addressed his client's grievances and ensured that true and correct
disclosures are made in the DRHP and RHP) have satisfactorily dealt with the
said complaint.
14. He submits that there is no delay on his client's part in
approaching this Court and points out that even though the DRHP was
published as far back as on 31st January 2025, it was kept in abeyance by
SEBI from February 2025 till July 2025, and it is only thereafter that his
client properly scrutinized the (voluminous) document, which culminated in
his complaint dated 27th September 2025 being made and which has been
summarily disregarded, given the stereotype response received from the
BRLMs and WeWork India of even date. He submits that his clients'
subsequent letter dated 29th September 2025 has not been responded to and
hence, the present Writ Petition came to be filed on 30 th September 2025. Mr.
Dhond also points out that given the present Writ Petition, which highlights
grievances against the inaction on the part of SEBI (who is the Market
Regulator and who is duty bound to protect the interest of all depositors in
the country), mere delay by itself, can never be made an issue and disentitle
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Hemant Vs. SEBI & Ors.
the petitioner to maintain the Writ Petition or to the interim reliefs, sought
therein.
15. Insofar as the locus of his client to maintain the present Writ
Petition is concerned, Mr. Dhond submits that the ICDR Regulations expressly
permit potential investors to raise objections to the contents of the Offer
Documents that are published and if the authorities fail to properly redress
such grievances, parties (like his client) have no other option but to approach
this Court exercising extraordinary jurisdiction under Article 226 of the
Constitution of India by filing a Writ Petition, as has been done in the instant
case.
16. Considering the events that have transpired in the matter, Mr.
Dhond submits that his client has no intentions to scuttle or thwart the IPO
of WeWork India, but rather, he only seeks that the Offer Documents,
including the DRHP and the RHP should contain all the relevant disclosures
with true and proper facts, so that the public at large and potential investors,
(like his client), are not misled into investing their hard earned monies into
the IPO.
17. Mr. Amit Desai highlights the serious criminal charges faced by
the Promoter/s of WeWork India in the pending criminal proceedings and the
repercussions thereof, if such proceedings were to result in a conviction and
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Hemant Vs. SEBI & Ors.
adds that the disclosures in the DRHP and RHP are materially incomplete
and misleading and ought to have set out the fact that in the chargesheet
filed by CBI against the Promoter/s of WeWork India, there are charges
drawn for grave offenses under Section 409 and 477-A of the IPC and
Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption
Act,1988.
18. Mr. Desai further points out that though the disclosures are
made in the Offer Documents about pending criminal proceedings seeking
quashing of the CBI chargesheet being filed before the High Courts of
Telangana and Andhra Pradesh, there is a deliberate omission to mention the
fact that no stay has been granted in favour of the Promoter/s of WeWork
India in the said proceedings. Mr. Desai also submits that even though there
are disclosures to the proceedings initiated by the ED against the Promoter/s
of WeWork India (in relation to the same subject matter under which
proceedings were launched under the PMLA against them), there is no
disclosure that in addition to the F.I.R., a chargesheet has also been filed
against the said Promoter/s which includes charges under Section 3 and 4 of
PMLA and there are also no details provided, of the offenses that initiated
the said investigation. Thus, Mr. Desai joins Mr. Dhond in submitting that the
DRHP and the RHP contain gross mis-statements and lack full and complete
disclosures and particulars containing the true and correct facts, and as a
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
result, there is a necessity for this Court to interfere in the matter by granting
the interim reliefs sought in the present Writ Petition.
SUBMISSIONS OF THE PETITIONER IN WRIT PETITION (L) NO. 31301 OF 2025
19. To a large extent, the arguments advanced by Mr. Seervai
endorse those, made by Mr. Dhond and Mr. Desai (in the companion Writ
Petition). However, in addition, Mr. Seervai makes a more fundamental
submission, which is discussed hereunder.
20. Mr. Seervai submits that WeWork India could never have been
permitted by SEBI to come out with an IPO. In support, he relies on the
contents of General Order No.01 of 2012 issued by SEBI on 9 th November
2012 under section 11A of the SEBI Act 1992 relating to SEBI (Framework
For Rejection of Draft Offer Documents) Order, 2012. He has taken us
through various Sections of the DRHP and the RHP to support his said
contention that SEBI ought to have rejected the DRHP and RHP of the
WeWork India IPO. Whilst referring to Section V thereof, which contains
Financial Information of WeWork India, Mr. Seervai has highlighted the fact
that WeWork India had incurred net losses in Financial Year (F.Y.) 2024, 2023
and 2022 and as on 31st March 2024, also had a negative net worth of Rs.
437.50 Crores and relying thereon, submitted that SEBI ought not to have
permitted such a company to come out with an IPO where the proceeds of
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Hemant Vs. SEBI & Ors.
the IPO only provide an exit to its existing Promoters, especially in the
present case, where he submits that WeWork India only has a license to a
brand and to use office space. Mr. Seervai supports his submission by
inviting our attention to the objects of the offer that are mentioned in the
Offer Documents which categorically state that WeWork India will not
receive any proceeds from the offer and that the entire proceeds therefrom,
would instead go to the selling shareholders, after deducting a portion of the
offer expenses and relevant taxes thereon.
21. Next, Mr. Seervai invites our attention to the business of
WeWork India and in particular, on the brand name " WeWork" by relying on
the amended and restated Operations and Management Agreement (OMA)
dated 30th December 2024 entered into between WeWork India and WeWork
International Limited (WeWork International) under which, WeWork
International has merely given a limited and exclusive non-transferable
license to WeWork India to develop, own and operate centers in India, on the
terms and conditions set out therein. Mr. Seervai is at pains to point out the
relevant provisions of the OMA which interalia provides that if the Promoters
of WeWork India are convicted by any court in any criminal offense, they
would cease to be its Key Managerial Personnel (KMP) and this would
immediately result in WeWork International, terminating its license to the
"WeWork" brand given to WeWork India. The grievance made by Mr. Seervai
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
by highlighting this particular issue is that the Offer Documents ought to
have expressly mentioned the above details and consequences and by not
doing so, the public at large is being mis-guided and/or mis-informed into
investing in the said IPO.
22. By relying on the chargesheets filed against the Promoter/s of
WeWork India by the EOW and the CBI and also by the ED, Mr. Seervai
argues that SEBI ought to have applied the 'fit and proper' criteria which it
rigorously applies to its registered intermediaries including their Directors
and Key Managerial Personnel who are required to meet the 'fit and proper'
standards, as prescribed under Schedule II of the SEBI (Intermediaries)
Regulations, 2008 and in particular, Clause 3(ii) thereof, which provides that
if a chargesheet has been filed by any Enforcement Agency (like EOW, CBI,
ED, etc) in cases involving economic offences and is pending against a
Director, such individual shall be deemed not to meet the 'fit and proper'
criteria and would be ineligible to be appointed or continued as a Director of
the Intermediary. Mr. Seervai submits that the same principles, or at least
similar rigorous standards, ought to apply in the context of Promoters and
Directors of companies seeking to raise public funds through an IPO and
submits that, in such circumstances, since Mr. Jitendra Virwani and Mr. Karan
Virwani, the Promoters of WeWork India are facing grave and serious
allegations which are the subject matter of multiple chargesheets filed
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against them, they should not be permitted to remain on the Board of a 'soon
to be listed' entity that seeks to raise public funds through an IPO. Relying on
these submissions, Mr. Seervai also reiterates the submissions made by Mr.
Dhond and Mr. Desai and states that true and correct disclosures ought to be
directed to be made by WeWork India in the Public Offer Documents.
23. Mr. Seervai relies on the complaint dated 20 th August 2025 filed
by his client on 25th August 2025 with SEBI and states that the same has not
been responded to, save and except by a letter dated 11 th September 2025
received from WeWork India, casually denying all the allegations made by his
client. He submits that the authorities and in particular SEBI, have failed to
satisfactorily deal with the grievances raised by his client and it is only upon
such failure on their part to do so, that his client had no other remedy but to
approach this Court, immediately upon learning from various news reports
on 28th September 2025 that WeWork India was scheduled to launch its IPO
in the coming week. He therefore presses for the interim reliefs sought by his
client.
24. In support of the reliefs sought by his client, Mr. Seervai relies
on an order dated 3rd December 2024 passed by SEBI in the matter of
Trafiksol ITS Technologies Ltd where SEBI had directed the company
(Trafiksol) to refund the money paid by investors who had been allotted
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shares in the IPO on account of various irregularities committed by the
company. He also relies on the decision of the Division Benck of the Delhi
High Court in DLF Ltd. and Ors. Vs. Kimsuk Krishna Sinha 1 and the earlier
decision of the Single Judge in Kimsuk Krishna Sinha Vs. Securities and
Exchange Board of India and Ors.2. In that decision, the Division Bench had
exercised jurisdiction under Article 226 of the Constitution of India by
entertaining the Writ Petition and set aside the earlier order of the single
judge on the ground that SEBI had failed to consider the complaints made to
it against the proposed public issue. Thus, by this order, the Division Bench
directed SEBI to take a decision on the said complaints made by the
Complainant/Respondent therein and communicate the same to the parties.
Mr. Seervai submits that a similar order ought to be passed by this Court in
the present case since SEBI has failed to consider his clients' complaint.
RESPONSE OF RESPONDENT NO. 1 - SEBI
25. Per contra, Mr. Shiraz Rustomjee opposes the reliefs sought by
the Petitioners on the ground that neither of them have satisfactorily
explained the delay in approaching this Court. In the case of the Writ Petition
filed by Hemant Kulshrestha, Mr. Rustomjee points out that the Petitioner has
not satisfactorily explained the delay in making his complaint on 25 th
September 2025, for the first time, when the DRHP was published as long
2011 SCC Online Del 5605
2010 SCC Online Del 1448
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back as on 31st January 2025. He argues that even if his contention were to
be accepted that the DRHP was kept in abeyance between February 2025 and
July 2025, there is no plausible reason afforded by him that explains the
delay between July 2025 and 25 th September 2025, the day on which he
complained to SEBI as regards the contents of the DRHP. Insofar as, Vinay
Bansal's Writ Petition is concerned, Mr. Rustomjee points out that he too has
failed to justify the delay in making his complaint on 25 th August 2025 for
the first time. He thus cites delay, as the first ground which disentitles the
Petitioners to the interim reliefs sought by them.
26. Next, Mr. Rustomjee points out that neither (of the two) Writ
Petitions have been filed in the nature of a Public Interest Litigation (PIL).
Nonetheless, he submits that both Petitioners appear to be espousing the
cause on behalf of the public-at-large by asserting that the contents of the
DRHP and the RHP are misleading and inadequate, interalia pointing out
various deficiencies therein. However, by inviting our attention to the
contents of both Writ Petitions, he submits that both the Petitioners clearly
appear to be fully aware, not only of the facts that are stated to be
misleading in the DRHP and the RHP but also of the inadequacies therein. As
a result, he argues that the Petitioners cannot allege of (they) having being
misled or misguided into investing in the said IPO. Thus, Mr. Rustomjee
questions the locus of both the Petitioners in approaching this Court and that
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too, at a belated stage and submits that on this ground also, no reliefs ought
to be granted in their favour.
27. On merits, Mr. Rustomjee relies on the ICDR Regulations and in
particular, those contained in Part VI thereof, which relate to ' Disclosures and
filing of Offer Documents'. Our attention is also invited to Section 30 of the
Securities and Exchange Board of India Act, 1992 which empowers SEBI to
make these Regulations and in particular, to Section 31 thereof, which
provides for parliamentary sanction to such Regulations, published by SEBI.
He submits that as per the said Regulations, the primary obligation and
responsibility for ensuring the accuracy and correctness of the disclosures
made in the DRHP and RHP, lies on the Lead Manager/s, (the BRLMs, in the
present case of the WeWork IPO) who are required to comply with the
requisite (and other) Regulations and liaise with SEBI in that regard. He also
relies on Part VIII of the said Regulations, which deals with ' Issuance
conditions and Procedure for a company which is seeking to list its IPO '. He
submits that it is precisely to facilitate, streamline and standardize the
issuance of securities, that SEBI had come out with these Regulations to
provide a structure for companies to follow when offering securities to the
public, including interalia through an IPO. Whilst on this point, Mr.
Rustomjee informs the Court that during the Financial Year 2024-25, about
190 IPOs were launched in the country and if the Petitioner's contention
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were to be accepted, the staff/machinery of SEBI would be occupied only in
preparing/vetting the contents of the voluminous offer documents of these
IPOs.
28. In this regard, Mr. Rustomjee invites our attention to the letter
dated 8th July 2025 addressed by SEBI, to one of the BRLMs of the IPO viz.
JM Financial Limited - Respondent No.3 in Writ Petition (L) No.31373 of
2025, and submits that by this detailed letter which runs into seventeen
pages, SEBI had applied its mind to the contents of the DRHP by pointing out
and suggesting various modifications, changes and explanations that were
required to be made or included in the DRHP, and which has since also been
acted upon and made/incorporated in the RHP. To corroborate this assertion,
our attention is invited to Section II of the RHP containing the ' Risk Factors'
and in particular, to the item listed at Serial No. 1 under the heading
'Internal Risks' which discloses the proceedings initiated by the ED against
the Promoters and Chairman of WeWork India under the PMLA and the
possible effect of any adverse outcome therein to the business and
reputation of WeWork India. He submits that this item had initially appeared
under 'Section VI' of the DRHP which discloses various outstanding litigation
proceedings against the Company and its Promoters and it was only at
SEBI's instance, and pursuant to its letter dated 8 th July 2025 addressed to
the Lead Manager, that the said item moved to the top of the list and has
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
now been shown at Serial No. 1 of the ' Risk Factors' under 'Section II' of the
RHP, so that the attention of the public-at-large would be drawn to it at the
very outset, when one reads the Offer Documents. He therefore submits that
SEBI has discharged its obligations under the said Regulations by ensuring
that the contents of the Offer Documents are in accordance with the said
Regulations and other legal provisions and on this ground also, no reliefs are
warranted.
29. In response to Mr. Seervai's argument that SEBI ought not to
have permitted WeWork India to come out with an IPO under which, no part
of its sale proceeds would accrue to the company, Mr. Rustomjee submits
that the same is misconceived. He points out that Mr. Seervai's reliance on
'General Order No.1 of 2012' is incorrect, considering that SEBI has since,
published the ICDR Regulations in 2018 expressly dealing with the issue of
capital and disclosure requirements to be followed by an unlisted issuer (like
WeWork India, in the present case) coming out with an IPO. Accordingly, he
contends that post 2018, all unlisted issuers (including the Petitioner in the
instant case) are required to comply with the provisions of the said ICDR
Regulations which (impliedly) supersede those contained in General Order
No. 1 of 2012. He has painstakingly taken us through the provisions of the
ICDR Regulations including Regulation 6, which prescribes the eligible
requirement for an IPO and our attention is drawn to Regulation 6(2)
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
thereof, which entitles an issuer, who is otherwise disentitled by virtue of
Regulation 6(1), to come out with an IPO, provided that the same is made
through the 'book-building process' and the issuer undertakes to allot at
least seventy-five percent of the net offer to Qualified Institutional Buyers
(QIBs) and to refund the entire subscription money, if they fail to do so. He
also relies on Section 28 of the Companies Act, 2013 which permits members
of a company in consultation with its Board of Directors to offer, part of their
holding of shares to the public and submits that the WeWork IPO is entirely
permissible in law.
30. Mr. Rustomjee submits that in the case of an expert regulatory
body (such as SEBI, in the present case), various judicial precedents
expressly stipulate that there should be minimum interference from courts.
In support of this assertion, he relies on the decisions in (i) Ashok Kumar
Saxena V/s SEBI and Ors.3 (ii) Vishal Tiwari V/s. Union of India and Ors. 4
(iii) Infrastructure Watchdog Out V/s. SEBI and Ors. 5 and (iv) Infrastructure
Watchdog Out V/s. SEBI and Ors.6
31. Mr. Rustomjee also invites our attention to the letter dated 17 th
September 2025 addressed by the 5 BRLMs to SEBI, in response to the
Order dated 29th October 2021 passed by the Delhi High Court in Writ Petition (C) No.12429 of 2021
(2024) 4 SCC 115
Order dated 28th August 2025 passed by the Supreme Court in Civil Appeal (Diary) No. 38576 of 2025
Order dated 16th July 2025 passed by the Securities Appellate Tribunal (SAT), Mumbai in Appeal No.111 of
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
complaint dated 25th August 2025 which was made by Vinay Bansal and
thereafter forwarded by SEBI to the said BRLMs and WeWork India for their
response. He submits that by this letter, SEBI was informed by the BRLMs
that the said complaint was adequately responded to by their letter dated
16th September 2025. The said letter further reveals that even WeWork India
had separately responded to the said complaint by its letter dated 11 th
September 2025. By relying on this correspondence, Mr. Rustomjee submits
that SEBI has satisfied itself that the complaint made by Vinay Bansal was
adequately dealt with, not only by the said BRLMs, but also by WeWork
India. Accordingly, he submits that Vinay Bansal is guilty of suppression
inasmuch as, his Writ Petition clearly fails to mention and/or annex the said
reply dated 16th September 2025 given by the said BRLMs. Our attention is
invited to this reply and it is contended that the same contains a detailed
response to each and every allegation/grievance made in the said complaint.
In the bargain, Mr. Rustomjee submits that Vinay Bansal has deliberately
avoided impleading the said BRLMs in his Writ Petition, as has been done by
Mr. Hemant Kulshrestha, the other Petitioner. He submits that on this ground
alone, no reliefs ought to be granted in his favour.
RESPONSE OF RESPONDENT NO. 2 - WEWORK INDIA
32. Mr. Darius Khambata supports the arguments made by Mr.
Rustomjee. In addition, he submits that the IPO is in conformity with the
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Hemant Vs. SEBI & Ors.
requirements stipulated in the ICDR Regulations and in particular Regulation
6(2) thereof. Mr. Khambata states that 75 percent of the shares are being
offered to QIBs, 15 percent are being offered to Non-Institutional Investors
(NIIs) and the remaining 10 per cent are being offered to Retail Individual
Investors (RIIs). Mr. Khambata reiterates that by the said IPO, the Promoters
of WeWork India are not exiting from the company, as sought to be
erroneously urged, but are instead, merely reducing their shareholding
therein, so as to facilitate the listing of its shares on the stock exchange for
which 25 percent of the company's shareholding is mandatorily required to
be held by the public, as per Rule 19(2)(b)(i) of Securities Contracts
(Regulation) Rules, 1957. He has also taken us through the contents of the
DRHP and RHP and submits that all the allegations and grievances raised,
are totally unfounded, inasmuch as, all the necessary and required
disclosures have been adequately made in the Offer Documents. In addition,
he points out that in the Offer Documents, there is an express disclosure to
the complaints filed by the two Petitioners, together with the response/s
given to such complaints by WeWork India and the said BRLMs. Moreover,
Mr. Khambata points out that these complaints/replies are also included in
Section IX of the RHP which relates to 'Material Contracts and Documents
for Inspection' wherein full disclosures of both complaints and the responses
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thereto has been made and the public at large is also invited to inspect such
correspondence, if they so desire.
33. Mr. Khambata tenders a copy of an online report issued by the
Press Trust of India dated 2nd October 2025 which records that since the
opening of the WeWork India IPO to Anchor Investors/QIBs on 1 st October
2025, the IPO has already collected a huge sum of Rs. 1348 Crores from
Mutual Funds such as ICICI Prudential Mutual Fund, HDFC Mutual Fund,
Motilal Oswal Mutual Fund, Aditya Birla Sun Life Mutual Fund, Axis Mutual
Fund, Canara Robeco Mutual Fund as well as from Insurance Firms such as
Canara HSBC Life Insurance, SBI General Insurance, Kotak Mahindra Life
Insurance and Bajaj Allianz Life Insurance. The said report also records that
Global Investors such as Goldman Sachs Funds, AI Mehwar Commercial
Investments LLC (Wanda) and Allianz Global Investors have invested in the
said IPO. By relying on this report, he has contended that such reputed
entities would not have invested in the WeWork IPO, if they had found any
anomalies in the Offer Documents, as dishonestly sought to be contended by
the Petitioners.
34. Lastly, he questions the motives of the Petitioners by filing this
litigation at such a belated stage and submits that the same is obviously done
for oblique reasons, which are not far to seek. Mr. Khambata submits that
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Hemant Vs. SEBI & Ors.
both the Petitioners have also approached this Court after an unexplained
delay and on this ground, no reliefs ought to be granted in their favour. He
relies on the decisions of the Supreme Court in Karnataka Power Corporation
Ltd. and Anr. vs. K. Thanjgappan and Anr. 7 and Chennai Metropolitan Water
Supply and Sewerage Board and Ors. vs. T.T. Murali Babu 8 in that regard. He
therefore submits that there is no merit in the allegations raised in both Writ
Petitions and the same ought not to be entertained by this Court.
35. Mr. Gaurav Joshi adds that in the past, several loss-making
companies such as One 97 Communications Ltd., Swiggy Ltd., and Zomato
Ltd. have come out with an IPO. He further points out that Hyundai Motor
India Ltd. and Bharti Hexacom Ltd. had, in the past, successfully come out
with IPOs wherein, their Promoters had offered their shares to the public. He
therefore submits that these objections raised by the Petitioners are entirely
misconceived and ought not to be countenanced by this Court. Mr. Joshi
informs this Court that in accordance with the timeline of the WeWork India
IPO, it was open to Anchor Investors on 1st October 2025 and subsequently,
to RIIs on 3rd October 2025 and has since, closed for all investors on 7th
October 2025, after which, the requisite Prospectus has also been filed with
SEBI. We are also informed that the shares are due to be allotted on 9 th
(2006) 4 SCC 322
(2014) 4 SCC 108
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Order dated 1st December 2025
W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
October 2025 after which, they would be listed on the stock exchange the
following day viz. on 10th October 2025.
RESPONSE OF RESPONDENT NO. 3 TO 7 (BRLMs) IN WRIT PETITION (L) NO.
31373 OF 2025
36. We have also heard Mr. Janak Dwarkadas who appears on behalf
of Respondent Nos. 3 and 7 and Mr. Ravi Kadam who appears on behalf of
Respondent Nos 4 to 6. Both of them reiterate the submissions made on
behalf of SEBI and WeWork India and submit that the said WeWork IPO is in
compliance with all the requirements stipulated in the ICDR Regulations and
that the Offer Documents contain all the requisite details and information, as
required by law. Accordingly, they submit that no interference is merited in
the matter. They also raise a grievance that Vinay Bansal has deliberately
avoided impleading the BRLMs in his Writ Petition which instead, proceeds
on a false premise that his complaint has not been adequately responded to,
which is now shown to be false and on this ground, no reliefs ought to be
granted in his favour.
ANALYSIS AND FINDINGS
37. We have considered the submissions made by all the parties and
also gone through the voluminous record with their assistance. We first, deal
with the submission that the WeWork India IPO ought not to have been
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Hemant Vs. SEBI & Ors.
permitted by SEBI on account of the same being impermissible under the
provisions of the General Order No.01 of 2012.
38. A perusal of the said General Order would reveal that the same
has been issued by SEBI interalia laying down general criteria, subject to
which, draft Offer Documents filed for issue of securities may be rejected by
it. This includes a case where SEBI has reasonable grounds to believe that
the adequacy and quality of disclosure in such Offer Documents are not
satisfactory or when it is of the view that, by such disclosures, an investor
may not be able to clearly evaluate the risks associated with the issue. The
said General Order also clearly stipulates that SEBI does not regulate on
merits, or approve the document of offer/issue of securities, but instead, only
mandates a true, fair and adequate disclosure to be made, so that investors
are put on notice, and may exercise due diligence and caution whilst taking a
decision on whether to subscribe to the issue. Moreover, a perusal of the said
General Order would also reveal that the same only contains broad criteria
on the basis of which draft Offer Documents would be scrutinized by SEBI
and basis which, SEBI may exercise its discretion and reject the same. Hence,
it is quite clear that the said General Order is clearly directory and not
mandatory. In these circumstances, the reliance on its provisions/clauses by
Mr. Seervai and his resultant argument that since the WeWork IPO falls foul
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Hemant Vs. SEBI & Ors.
of the requirements stipulated therein, is in our view, without any merit.
Even otherwise, Clause (2) of the said General Order expressly states that the
criteria specified for rejection are only illustrative and indicative, and are
only in the nature of general standards. Sub-clause (iv) therein, further
clarifies that the mere triggering of any or a few criteria mentioned in the
said General Order cannot be regarded as an automatic case for rejection and
that in all such cases, a final view on rejection shall be taken by SEBI, after
considering the materiality of the findings and facts and circumstances of
each case.
39. In any event, it appears that the reliance of Mr. Seervai on this
General Order issued by SEBI on 9th October 2012 is also erroneous on
account of the fact that subsequently, on 11 th September 2018, SEBI has
notified the ICDR Regulations, 2018. As a result, Mr. Rustomjee appears to be
correct in his submission that the provisions of the said General Order are
superseded, at least to the extent of the provisions contained in the ICDR
Regulations. A perusal of the ICDR Regulations clearly reveal that they
contain an exhaustive list of requirements that are required to be complied
with by an Issuer coming out with an IPO. These are found in Regulation 6 of
the said ICDR Regulations. For the sake of convenience and ready reference,
it would be advantageous to reproduce the relevant regulation(s)
hereunder :-
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Order dated 1st December 2025
W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
6(1) An issuer shall be eligible to make an initial public offer
only if :
a) it has net tangible assets of at least three crore
rupees, calculated on a restated and consolidated basis, in
each of the preceding three full years (of twelve months
each), of which not more than fifty per cent are held in
monetary assets :
Provided that if more than fifty per cent of the net tangible
assets are held in monetary assets, the issuer has utilised or
made firm commitments to utilise such excess monetary
assets in its business or project;
Provided further that the limit of fifty per cent. on monetary
assets shall not be applicable in case the initial public offer
is made entirely through an offer for sale.
b) it has an average operating profit of at least fifteen
crore rupees, calculated on a restated and consolidated
basis, during the preceding three years (of twelve months
each), with operating profit in each of these preceding three
years;
c) it has a net worth of at least one crore rupees in
each of the preceding three full years (of twelve months
each), calculated on a restated and consolidated basis;
d) if it has changed its name within the last one year,
at least fifty per cent. of the revenue, calculated on a
restated and consolidated basis, for the preceding one full
year has been earned by it from the activity indicated by its
new name.
(2) An issuer not satisfying the condition stipulated in sub-
regulation (1) shall be eligible to make an initial public offer only if
the issue is made through the book-building process and the issuer
undertakes to allot at least seventy five per cent. of the net offer to
qualified institutional buyers and to refund the full subscription
money if it fails to do so.
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Hemant Vs. SEBI & Ors.
40. Thus, it is seen that even though an Issuer does not satisfy the
conditions stipulated under Sub-Regulation (1) of Regulation 6, it would
none-the-less be eligible to make an IPO if the issue is made through the
book-building process and it undertakes to allot at least seventy-five percent
of the net offer to Qualified Institutional Buyers (QIBs) and further
undertakes to refund the full subscription money, in the event it fails to do
so. In the present case, the Offer Documents clearly reveal that the WeWork
India IPO is being made through the book-building process. This position is
clearly disclosed in the RHP which states that: "The Offer is being made
through the Book Building Process, in compliance with Regulation 6(2) and
Regulation 31 of the SEBI ICDR Regulations". 9 The other requirement of the
Issuer undertaking to allot at least seventy-five percent of the net offer to
QIBs is also satisfied from the statements made in the RHP 10. Hence, it is
evident that the WeWork India IPO is in compliance with Regulation 6(2) of
ICDR Regulations and is therefore permissible. There is no infirmity on the
part of SEBI in permitting WeWork India in making this IPO, contrary to what
has contended by Mr. Seervai. Accordingly, we are not inclined to accept the
arguments of Mr. Seervai that WeWork India, on account of making losses in
F.Y. 2022, 2023 and 2024 and having a negative net worth as on 31 st March
WeWork India, Red Herring Prospectus, Section VII ('Offer Related Information'), 'Offer Structure', p.
529.
WeWork India, Red Herring Prospectus, Section VII ('Offer Related Information'), 'Offer Structure', p.
529.
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Order dated 1st December 2025
W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
2024, is disentitled from coming out with the said IPO.
41. Section 28 of the Companies Act, 2013 expressly permits the
offer of sale of shares of a company by its members, provided that, such offer
is in consultation with the company's Board of Directors and in accordance
with the provisions of law. The section further provides that the document
through which the offer of sale to the public is made is deemed to be a
prospectus issued by the company, and that all laws and rules made
thereunder, governing the contents of the prospectus, would apply as if it is
a prospectus issued by the company. In the present case, through the
WeWork India IPO, its Promoters are offering (part of) their shares to the
public. This offer is in consultation with its Board of Directors and made
through the offer documents, DRHP and RHP which are deemed to be a
prospectus and are therefore, in compliance with the ICDR Regulations. We
also find that by this IPO, the Promoters of WeWork India do not seek to exit,
as erroneously sought to be contended but are merely reducing their
shareholding in the company to facilitate its listing on the stock exchange,
for which twenty-five percent of its shareholding is required to be held by the
public, as prescribed under Rule 19(2)(b)(i) of the Securities Contracts
(Regulation) Rules, 1957. Accordingly, we are of the considered view that
there is no merit in the main argument advanced by Mr. Seervai that SEBI
could not have permitted the said WeWork India IPO on account of it falling
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
foul of the applicable legal requirements.
42. There is also no merit in the submission made by Mr. Seervai
that SEBI ought to apply the 'fit and proper' criteria prescribed under
Schedule II of the SEBI (Intermediaries) Regulations, 2008 since no such
requirements are prescribed in the ICDR Regulations which exhaustively deal
with the requirements to be complied with by an issuer coming out with an
IPO.
43. Let us now deal with the other ground of the disclosures in the
DRHP and RHP being incomplete and/or misleading and, as a result thereof,
inadequate for the public to make an informed decision on whether to invest
in the IPO. In this regard, the Petitioner's grievances are two-fold: firstly,
that there is no complete disclosure of all the sections of the relevant statutes
under which chargesheets have been filed against the Promoters of WeWork
India, and secondly, that the effect and consequence of any conviction
pursuant to such chargesheets on the 'WeWork' brand held by WeWork India
has not been adequately disclosed.
44. Insofar as the first grievance is concerned, we have observed
that the DRHP and RHP mention and provide details of the chargesheets
filed against the Promoters of WeWork India and disclose particulars of
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Hemant Vs. SEBI & Ors.
various litigations involving them and WeWork India at several places. Since
the DRHP has given way to RHP, we will consider the adequacy of disclosures
made in the RHP for the purposes of this order. To address this contention,
reference is made to the pertinent portions of the RHP where the said
disclosures are enumerated:
(i) Table summarizing the outstanding litigation
involving the Company, its Directors, Promoters and
various other Personnel.11
(ii) The "Risk Factors" enumerated under Section II of
the RHP includes disclosures relating to ongoing litigation
proceedings against the company and its Promoters. 12
Under this section, there are a number of 'Internal Risks'
which have been enumerated for the general public which
they can consider before they subscribe to the shares of
WeWork India. One of the risks which has been disclosed
gives details of the proceedings which had been initiated by
the ED against the Promoter and Chairman of WeWork
India - Mr. Jitendra Virwani in 2014 under the PMLA, 2002
and the risks involved in if there is any adverse outcome in
the same.13
WeWork India, Red Herring Prospectus, 'Summary of Outstanding Litigation', p. 21.
WeWork India, Red Herring Prospectus, Section II ("Risk Factors"), pp. 45-112
WeWork India, Red Herring Prospectus, Serial No. 1 of 'Internal Risks', p. 46.
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Hemant Vs. SEBI & Ors.
(iii) The "Legal and Other Information" as enumerated
under Section VI of the RHP gives details of all outstanding
litigation proceedings involving the company, subsidiaries
and directors. The additional details of the criminal
proceedings initiated against the promoters of WeWork
India are disclosed therein.14
(iv) The 'Forward-Looking Statement' enumerated
under Section I of the RHP lists certain significant factors
that could cause WeWork India's actual results to differ
materially.15 Serial No. 1 thereof expressly discloses that
any adverse outcome in the proceedings initiated by the ED
against Mr. Jitendra Virwani, promoter of WeWork India
under the PMLA could materially affect the company.
(v) Serial No. 12 of the 'Internal Risks' at page 55 of
the RHP also contains brief details of the outstanding legal
proceedings faced by WeWork India, its Promoters etc. and
the possible risks of any adverse outcome therein to its
business.
45. Upon a detailed perusal of all these disclosures, we find
that the same clearly reveal the chargesheets filed against the
WeWork India, Red Herring Prospectus, p. 491
WeWork India, Red Herring Prospectus, 'Forward-Looking Statement', p. 43
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Hemant Vs. SEBI & Ors.
Promoter/s of WeWork India, both by CBI as well as, the ED.
Moreover, we also note that even though one chargesheet was filed
under Section 120B, 420, 409, 477A of the IPC and Section 13(2)
read with Section 13(1)(d) of the Prevention of Corruption Act,
1988, there is reference to only Sections 120B and 420 in the RHP
whilst the other sections are not mentioned. We are not however
impressed with the argument that this results in incorrect and/or
inaccurate disclosures being made by WeWork India, inasmuch as, the
disclosures made in RHP clearly reveal that the chargesheet was filed
under several provisions, including Section 120B and 420 of the IPC
thereby clearly indicating that charges under other provisions have
also been framed against the said Promoter/s. Moreover, the common
man is not expected to know the exact (nature of the) offense by
merely looking at the relevant section(s) that is disclosed. Thus, upon
going through the RHP and reading about the chargesheet(s) filed
against the promoter(s) of WeWork India, to an investor, who is
otherwise not familiar with the provisions of the IPC, the mere filing
of chargesheet against the Promoter (of the Issuer) would be enough
to deter him from investing in the IPO. On the other hand, where an
investor is familiar with the provisions of the IPC, he will be put to
notice that in addition to Sections 120B and 420 (that are disclosed
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in the RHP), charges have also been framed under other provisions of
the IPC - in which case, such investor could make further inquiries in
that regard, if he so desires.
46. In any event, under Serial No. 26 of the 'Internal Risks' in
the RHP, there is a comprehensive table which sets out details of all
the complaints made against WeWork India, its Promoters and
members of the Promoters group together with the response/s given
thereto by WeWork India/BRLMs, as the case may be. 16 At Serial No.
5 of this table, there is a disclosure of the complaint dated 20 th
August 2025 made by Mr. Vinay Bansal, whereas Serial No. 6
discloses the complaint dated 25th September 2025 made by Mr.
Hemant Kulshrestha. We have perused the details and particulars set
out in this table and we are of the view that adequate disclosures
have been made therein. Not only that, but as more particularly set
out at end of the said table17, all the complaints and corresponding
responses by WeWork India and/or the BRMLs are also included in
the "Material Contracts Documents for Inspection", for public
inspection.18
47. Moreover, in the ordinary course, one would expect that
WeWork India, Red Herring Prospectus, pp. 68-75
WeWork India, Red Herring Prospectus, p. 75
WeWork India, Red Herring Prospectus, p. 617
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Hemant Vs. SEBI & Ors.
any investor who is alarmed to note that chargesheets have been filed
against Promoter/(s) of a company issuing an IPO, would then
proceed to examine the entire contents of the RHP. Upon going
through the RHP, the investor would also note that several complaints
have also been made by other persons (including the Petitioners in
the two Writ Petitions before us) and it would be free for such a
person to inspect all these documents which include the complaints
and responses thereto given by the company and/or BRLMs, as the
case may be. Hence, we are of the opinion that there is no
suppression, either gross or deliberate, as erroneously contended by
the Petitioners.
48. Insofar as the other point raised viz. that there is no adequate
disclosure of the incumbent risk faced by the 'WeWork' Brand if the
promoters are convicted in any of the said criminal cases, at the very outset,
we note that this risk is expressly set out at Serial No. 10 of the 'Risk
Factors'19 and a detailed description thereof is also provided at Serial No. 10
of the 'Internal Risks'.20 A perusal of the disclosures made under this item
reveal that there is a clear reference to the re-stated and amended
Operations and Management Agreement ('OMA') dated 30 th December 2024
under which, the 'WeWork' brand is licensed by WeWork International to
WeWork India, Red Herring Prospectus, pp. 22-23
WeWork India, Red Herring Prospectus, p. 54
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WeWork India and the adverse impact that would be faced by WeWork India
if the said OMA is terminated. In our view, there is no need or requirement
for the Offer Document to specifically disclose all or any of the grounds
under which such license could be terminated by WeWork International, one
of which includes disqualification of the promoters as Key Managerial
Personnel (KMP) in the event of facing conviction in any criminal
proceedings preferred against them.
49. Serial No. 55 of the 'Internal Risks' also contains a description of
the risks faced by WeWork India and in particular their Intellectual Property
Rights and the substantial harm that this could have on its business. 21 This
item also describes the possible risks that WeWork India would face if the
OMA is terminated. The details of the OMA are also set out under the
'Summary of Key Agreements' entered into by WeWork India in the RHP. As a
result, we are also not impressed with the second submission made by the
Petitioners on the Offer Documents containing insufficient and/or incorrect
disclosures insofar as the OMA is concerned. In these circumstances, we are
of the considered view that the (contents of the) RHP is in compliance with
the ICDR Regulations and the allegations to the contrary, made by both the
Petitioners have no merit and are accordingly, not accepted by this Court.
WeWork India, Red Herring Prospectus, p.95
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Hemant Vs. SEBI & Ors.
50. With this, we now consider the role of SEBI, as prescribed under
the ICDR Regulations. Part V of the said ICDR Regulations deal with the
issue of appointment of Lead Manager/s, other Intermediaries and
Compliance Officer, whereas Part VI deals with regulations relating to
'Disclosures in and Filing of Offer Documents'. Regulation 24 prescribes that
the DRHP and RHP are required to contain all material disclosures that are
true and adequate to enable an applicant/investor to take an informed
investment decision. The said Regulation further prescribes that the Lead
Manager/s to the issue (appointed by the issuer) are required to exercise due
diligence and satisfy themselves about all the aspects of the issue including
the veracity and adequacy of the disclosures made in the Offer Documents.
For the sake of convenience, the said Regulation 24 is reproduced
hereunder :
"Disclosures in the draft offer document and offer document
24 - (1) The draft offer document and offer document shall contain all
material disclosures which are true and adequate to enable the
applicants to take an informed investment decision.
(2) Without prejudice to the generality of sub-regulation (1), the red-
herring prospectus, and prospectus shall contain :
(a) disclosures specified in the Companies Act, 2013 and;
(b) disclosures specified in Part A of Schedule VI.
(3) The lead manager(s) shall exercise due diligence and satisfy
themselves about all aspects of the issue including the veracity and
adequacy of disclosure in the draft offer document and the offer
document.
(4) The lead manager(s) shall call upon the issuer, its promoters and its
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
directors or in case of an offer for sale, also the selling shareholders,
to fulfil their obligations as disclosed by them in the draft offer
document and the offer document and as required in terms of these
regulations.
(5) The lead manager(s) shall ensure that the information contained in
the draft offer document and offer document and the particulars
as per restated audited financial statements in the offer document
are not more than six months old from the issue opening date."
51. Regulation 26 of the ICDR Regulations provides for the draft of
the DRHP to be made public for comments and for other ancillary provisions
which appear to be aimed at making the public aware of such draft Offer
Documents and inviting their comments in respect of the disclosures made
therein. Under this Regulation also, the responsibility of ensuring compliance
of its provisions lies on the Lead Manager/s of the issue who is/are required
to file the details of the comments received either by them or by the issuer,
from the public on the draft Offer Documents, together with consequential
changes, if any, that are required to be made in the draft Offer Documents
and this information is required to be submitted to SEBI. For the sake of
convenience and ready reference, the contents of the said Regulation is
reproduced hereunder :-
"Draft offer document and offer document to be available to the public
26 (1). The draft offer document filed with the Board shall be made
public for comments, if any, for a period of at least twenty one days
from the date of [publication of the public announcement under sub-
regulation (2)], by hosting it on the websites of [the issuer,] the
Board, stock exchanges where specified securities are proposed to be
listed and lead manager(s) associated with the issue.
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Hemant Vs. SEBI & Ors.
(2) The issuer shall, within two [working] days of filing the draft offer
document with the Board, make a public announcement in one
English national daily newspaper with wide circulation, one Hindi
national daily newspaper with wide circulation and one regional
language newspaper with wide circulation at the place where the
registered office of the issuer is situated, disclosing the fact of filing
of the draft offer document with the Board and inviting the public to
provide their comments to the Board, the issuer or the lead
manager(s) in respect of the disclosures made in the draft offer
document.
(3) The lead manager(s) shall, after expiry of the period stipulated in
sub-regulation (1), file with the Board, details of the comments
received by them or the issuer from the public, on the draft offer
document, during that period and the consequential changes, if any,
that are required to be made in the draft offer document.
(4) The issuer and the lead manager(s) shall ensure that the offer
documents are hosted on the websites as required under these
regulations and its contents are the same as the versions as filed with
the Registrar of Companies, Board and the stock exchanges, as
applicable.
(5) The lead manager(s) and the stock exchanges shall provide copies of
the offer document to the public as and when requested and may
charge a reasonable sum for providing a copy of the same."
52. Under Regulation 52, the responsibility of the Lead Manager/s is
prescribed to continue until completion of the issue process and also for any
issue related matters thereafter and it is the Lead Manager/s who are
required to regularly monitor redressal of investors grievances arising from
any issue related activity.
53. Thus, upon careful perusal of the ICDR Regulations and in
particular those referred to above, it is clear that the primary obligation to
ensure that the Offer Documents contain all material disclosures that are true
and adequate so as to enable the public/investor to make an informed
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
investment decision of whether to subscribe to the proposed issue, rests on
the Lead Manager/(s). In the present case, admittedly, WeWork India has
appointed Respondent Nos. 3 to 7 as the BRLMs of the IPO and therefore, the
primary responsibility in that regard would rest with them. Hence, the
BRLMs are required to exercise due diligence and satisfy themselves about
all the aspects of the WeWork India IPO, including the veracity and adequacy
of the disclosures in the DRHP and RHP. The role of SEBI in this regard
would only be supervisory in nature.
54. Given this requirement, when the letter dated 8th July 2025
addressed by SEBI to one of the BRLMs 22 is seen, it is evident that SEBI has
in fact exercised such discretion and applied its mind to the contents of the
Offer Documents and submitted a detailed list of its observations thereon.
We have gone through this list (that is annexed to this letter) and we are
satisfied with the steps taken by SEBI in that regard. Observation 9.3 of the
detailed list enumerated under Annexure I of the said letter clearly reveals
that it is pursuant to this observation made by SEBI that the disclosure at
Serial No.1 of the 'Internal Risks' of the RHP came to be included which
relate to the criminal proceedings initiated against the Promoter/s of
WeWork India and the chargesheet filed against them in the said proceedings
Respondent No.3 in Writ Petition (L) No. 31373 of 2025
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
by the ED.23 Similarly (and illustratively) at Observation 9.11, SEBI has
(applied its mind and) directed the BRLMs to disclose the risk mentioned
under Serial No. 45 of the 'Internal Risks' under the DRHP as a negative
qualifying statement.24
55. In the circumstances, we are satisfied that SEBI has indeed
exercised due care and caution and complied with the legal requirements,
including those prescribed under the ICDR Regulations, in connection with
the WeWork India IPO and the submissions to the contrary made by the
Petitioners have no merit.
56. Our finding is also fortified by the decision of the Delhi High
Court in Ashok Kumar Saxena (supra) which holds that the RHP is required
to contain only a summary of the allegations (and not each and every
allegation) so as to enable a potential investor to be aware of the material
risks which the issuer/company faces.
57. As more particularly held by the Full Bench of the Supreme
Court in Vishal Tiwari (supra), when technical questions arise, particularly in
the financial or economic realm and experts with domain knowledge in the
said field have expressed their views and such views are duly considered by
the expert regulator in the exercise of its power, courts ought not to
WeWork India, Draft Red Herring Prospectus, p. 46
WeWork India, Draft Red Herring Prospectus, p. 74
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substitute their own view by supplanting the role of the expert. The said
decision cautions courts not to act as appellate authorities over policies
framed by the statutory regulator. It holds that the interference of courts
should be made only when it is found that the actions of the statutory
regulator are arbitrary or violative of constitutional or statutory mandates.
The said decision expressly holds that courts cannot examine the correctness,
suitability or appropriateness of the policy, particularly when it is framed by a
specialized regulatory agency in corroboration with experts and interference
ought not to be made by courts only because, in its opinion, a better
alternative is available.
58. The Full Bench has therefore held that courts should not advise
expert regulatory agencies on matters of policy which they are entitled to
formulate and when technical questions arise, particularly in the domain of
economic or financial matters and experts in the field have expressed their
views which are duly considered by the statutory regulator, the resultant
policies or subordinate legislative framework ought not to be interfered with.
The Full Bench has also noted the wide powers available with SEBI, coupled
with its expertise and robust information gathering mechanisms, which it
held to lend a high level of credibility to its decision as a regulatory,
adjudicatory and prosecuting agency. The Full Bench has further held that
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Order dated 1st December 2025
W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
keeping all these factors in mind, especially the public interest that guides
the functioning of SEBI, courts should be slow from substituting its own
wisdom in place of the actions of SEBI.
59. Keeping these principles in mind, this Court is not impressed
with the grievances raised by the Petitioners on the Offer Documents
containing inadequate or incomplete disclosures. In fact, the record clearly
reveals that the BRLMs appear to have exercised due diligence and have
ensured that all relevant and necessary information and adequate disclosures
are made therein, which position has since also been confirmed by SEBI.
60. A similar view is also taken by the Securities Appellate Tribunal
in Infrastructure Watchdog (supra) where, after analyzing the provisions of
the ICDR Regulations, it is held that the entire process relating to disclosures
that are required to be made in the Offer Documents is overseen by the Lead
Manager/(s).
61. The decision of SEBI in respect of Trafiksol (supra) cited by Mr.
Seervai is of no assistance and can easily be distinguished on its peculiar
facts. In any event, as already mentioned hereinabove, the Petitioners are not
pressing the said relief.
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Order dated 1st December 2025
W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
62. Insofar as the issue of delay is concerned, it is well settled that
delay or laches is one of the factors that is to be born in mind by the Court
especially whilst exercising discretionary powers under Article 226 of the
Constitution of India and no relief ought to be given to a Petitioner who
approaches the Court without a reasonable explanation for the inordinate
delay, which would otherwise disentitle him to the reliefs sought by him.
The aforesaid proposition is also reiterated in the two decisions of the
Supreme Court in Karnataka Power (supra) and Chennai Metropolitan
(supra) cited by Mr. Khambata. In the present case, admittedly, the RHP was
published only on 27th September 2025 and filed before SEBI before the very
next day, whilst the issue opened for Anchor Investors on 1 st October 2025
and subsequently, to RIIs, on 3 rd October 2025. Both the Petitioners have
approached this Court and filed their respective Writ Petitions on 30 th
September 2025 and hence it cannot be said that they are guilty of
inordinate delay in approaching the Court. However, a perusal of the
grievances made by them would reveal that the cause of action to make these
grievances to WeWork India, BRLMs and/or SEBI would arise, immediately
on the issuance of the DRHP viz. on/about 31st January 2025. Whilst we
accept that the DRHP was in fact kept in abeyance during the period from
February till July 2025, there is no justifiable reason disclosed in both Writ
Petitions as to why, after the DRHP was removed from the abeyance list in
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
July 2025, Hemant Kulkshetra addressed his first complaint only on 25 th
September 2025, whilst Vinay Bansal addressed his first complaint only on
25th August 2025. Notwithstanding the same, we have proceeded to decide
both Writ Petitions on merits.
63. This takes us to another point raised by the Respondents and
that is of the locus of the Petitioners in maintaining the present Writ Petition.
Hemant Kulkshetra is stated to be "a keen observer of the securities market
who regularly participates in the primary market and invests in initial public
offerings of companies across market sectors", whilst Vinay Bansal is stated
to be "an active retail investor who regularly participates in the primary
market and invests in initial public offerings of companies across market
sectors". Both Writ Petitions make similar grievances against the WeWork
India IPO which are stated to be made in public interest. Moreover, both
contend that the failure on the part of the Respondents to act upon the
Petitioner's complaint jeopardizes the rights of all retail investors who rely
upon SEBI's regulatory vigilance to safeguard the investors in the securities
market. Curiously, both Petitioners rely on the very same article/news report
dated 8th August 2025 titled "S&W flags non-disclosures by Embassy REIT,
IPO-bound WeWork India in complaint to SEBI " as being the source that
prompted them to make the complaint against WeWork India and pursuant
to which, they are stated to have discovered the material information that is
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
incorrectly mentioned in the DRHP and also omitted therefrom. However,
when one peruses this article/news report and compares it with the
averments made in the two Writ Petitions, it is seen that there are several
assertions and allegations found in the body of the Writ Petition which do not
find place in the said article/news report. Neither Petitioner has disclosed the
exact nature of inquiry undertaken by him and/or the source of such other
assertions and allegations. This casts some doubt on the bonafides of the
Petitioners.
64. Lastly, let us deal with the point of suppression raised by the
Respondents in the case of Vinay Bansal. During rejoinder arguments, when
confronted with the letters dated 11th September 2025 addressed by WeWork
India25 and 16th September 2025 addressed by the 5 BRLMs26, Mr. Seervai, on
instructions, confirms that the said letters were infact received by his client.
However, he is at pains to point out that this fact was not disclosed either to
him or to the instructing Attorney by Vinay Bansal and therefore, the same is
neither disclosed in the Writ Petition filed by him nor argued by him.
Immediately on this disclosure being made in court, Mr. Seervai, has
profusely apologized to this Court for the same and whilst this Court has no
hesitation in believing him and accepting his apology, we cannot do the same
for his client. The entire case of Mr. Vinay Bansal in the Writ Petition filed by
addressed by WeWork India to Vinay Bansal
addressed by the 5 BRLMs to Vinal Bansal
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Hemant Vs. SEBI & Ors.
him is that neither WeWork India nor SEBI, acted upon his complaints and as
a result of this inaction on their part, he is constrained to approach this
Court.
65. In fact, the two decisions in DLF Limited (supra) and Kimsukh
Krishna Sinha (supra) cited by Mr. Seervai in support of the very said
proposition and basis which, he has submitted that this Court ought to
exercise discretion and interfere in the matter was where no decision or
outcome was communicated to the aggrieved party by SEBI. Relying on these
two decisions, Mr. Seervai had vehemently advanced similar arguments and
sought directions to SEBI to conduct thorough investigation on his client's
complaint to inquire into and redress the grievances raised therein. However,
from reading these two letters, it is now revealed that not only have all the
allegations of Mr. Vinay Bansal been adequately dealt with and responded to
by WeWork India but the same have also been redressed by the 5 BRLMs, as
they are required to do under the ICDR Regulations.
66. In this background, it was incumbent upon Vinay Bansal to have
disclosed these two responses and impleaded the 5 BRLMs in the Writ
Petition filed by him, which has not been done, for reasons best known to
him. It is well settled that a party who approaches the court with unclean
hands or by withholding material documents and/or information is
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W.P. (L) NO. 31373 OF 2025
Hemant Vs. SEBI & Ors.
disentitled to any reliefs from the court and on this ground alone, we decline
to entertain the Writ Petition filed by Vinay Bansal and instead dismiss the
same with costs of Rs.1 lakh payable to the Maharashtra State Legal Services
Authority for this deliberate act of suppression.
67. Even otherwise, basis the discussions and findings that we have
arrived at and which are recorded hereinabove, this Court finds no merit in
both Writ Petitions and we decline to entertain the same. Accordingly, the
following order is passed:
ORDER
(i) Writ Petition (L) No. 31373 of 2025 filed by Hemant Kulshrestha
is hereby dismissed with no order as to costs;
(ii) Writ Petition (L) No. 31301 of 2025 filed by Vinay Bansal is
hereby dismissed with costs of Rs.1 lakh payable by him to the
Maharashtra State Legal Services Authority within a period of
two weeks from today;
(iii) Both Writ Petitions are hereby disposed of in terms of the above
order.
JYOTI by JYOTI
PRAKASH
PRAKASH PAWAR ( FARHAN P. DUBASH, J. ) ( R.I. CHAGLA J. )
PAWAR Date: 2025.12.01
18:59:40 +0530
Jyoti Pawar/Ajay Jadhav
WP(L) 31373-31301.2025
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Order dated 1st December 2025
