Could some one explain me technically as to why the bandwidth is severly limited in underwater channel for communications?
Acoustic communication is fundamentally limited because the channel bandwith is a function of the carrier frequency, and you cannot use high frequency carriers in acoustic applications. 

Wikipedia says 


  Typical frequencies associated with underwater acoustics are between
  10 Hz and 1 MHz. The propagation of sound in the ocean at frequencies
  lower than 10 Hz is usually not possible without penetrating deep into
  the seabed, whereas frequencies above 1 MHz are rarely used because
  they are absorbed very quickly. Underwater acoustics is sometimes
  known as hydroacoustics.


The channel bandwith is then limited (given ideal circumstances) to the nyquist rate.

Things like radio can use much, much wider channels. Traditional WiFi has a typical channel bandwith of 20 Mhz, whereas the maximum possible channel width of an acoustic communication medium is ~1 Mhz.

Basically, the physical transmission medium imposes a hard upper limit on the available throughput, which is then further reduced by real-world limitations (e.g. underwater noise, etc...).