Preeti,

You cannot send passwords like that to a Web service.  However, you can  
encrypt credentials in the header of SOAP requests using Microsoft's Web  
Services Enhancements:

http://msdn.microsoft.com/webservices/building/wse/default.aspx

This link will give you some info on how to do this correctly:

http://msdn.microsoft.com/webservices/building/wse/default.aspx?pull=/library/en
-us/dnwse/html/securusernametoken.asp

HTH,
Vern