Hi Simran
Please refer to the ongoing discussion below about support for TLS
Re: iaik.security.ssl.SSLException: Peer sent alert: Alert Fatal: handshake
If you refer to Peter Tari's replies there, you would see that when AS Java is acting as the client, SAP Java Cryptographic Toolkit is used (instead of SAP Cryptolib). And at the moment the toolkit only has support for TLS1.0.
It is a very long thread but there seems to be some progress with assistance from SAP Development there - you can check if their solution (which is for SOAP Axis) can be applied to your case as well.
Regards
Eng Swee