The problem I am facing matches exactly with the problem I have found here. They provide solution also but I am not able to understand it. Can someone please explain it in detail?
Following is the problem I've copied from the site.
Problem: Opening docx or pptx files in Office Web Apps 2013 results in the error "Sorry, Word Web App ran into a problem opening this document. To view this document please open it in Microsoft Word."
Resolution: I don't like it but I had to remove the link to the WCA farm, rebuild the WCA farm and hoop SP2013 back to the WCA farm. [sic]. Other documents were opening and I realised that my bindings were incorrect after I rebuilt.