Hi Ravi,
I think the issue is the water or atmosphere in contact with the stainless steel while the material is still at an elevated temperature. Corrosion with stainless steel is a whole different problem when chlorides/chlorine is present.
Were you able to read any of the info presented in that older posting that I linked earlier? I think you may be experiencing some of the same problems the original poster did in that thread.
I've seen water used in cooling copper shoes while welding mild steel, but stainless steel is a whole different situation.
Edit: Thanks for posting a picture