It seems like some windows server setting limitation that is failing those web service calls which are returning bigger volume of data. When I say big, surprisingly its just 10MB. Those web service calls that are running without issues in QV server returns lesser amount of data compared to the two which fails. We tried asking the source team to split the report horizontally and pass on web service URLs for each of those sub report. When tried separately, these runs in server successfully without any issues. As a work around, we now get this as separate record sets to qlikview and combine it in load script by concatenating.
Something needs to be changed at server settings..but I donno yet what !!