@KarthikKummera can you confirm you followed the  documentation and setup certificates and truststore as per Identifying the external system for a Connect REST rule? 

There is also detail on the Pega Community Wiki pages:  Importing external certificates into a Pega  Keystore.

Keystore and truststore can be configured at WAS,JVM and REST connector layer. 

Have you configured keystore at JVM layer (with password  null)?

Are you able to test by removing  truststore and keystore from rest connector and  configure keystore and truststore at WAS layer? Try adding the url in the dynamic outbound url configuration in the WAS layer. 

Are the  certificate  installed properly for  JVM?  Did you try  copying the certificates from existing servers to the new server in cacerts folder?   Browse for a file name such as /opt/IBM/WebSphere/AppServer/java/jre/lib/security/cacerts

Please refer to the vendor documentation.

Can you please provide a document with screenshots that Connect-Rest configuration settings?

SSL Debug information that is enabled will be available on WebSphere - Server log. "-Djavax.net.debug=SSL".

Or turn on debug at the JVM level in the Pega app server using -Djavax.net.debug=all

Reproduce the issue and provide application server log and  check the PegaRules log.  If the issue persists you may need to log a support Incident (please provide the INC id if you chose to go down this path).