Hi Selva,
Please verify the following details:
1) Private Key Password shouled be same as the password which is given while generating the key
2) The user <SID>adm should have read access to the key root path
3) Both extension of the public and private key should be recognized by the PGP encryption module
check this blog:
http://scn.sap.com/community/pi-and-soa-middleware/blog/2012/04/10/pgpencryption-module-how-to-guide
Check the firewall, as mentioned by Hareesh too
Cheers
Agasthuri
