Sybase ASE 12.5.4 EBF 14124 ESD#4 running out of connections

I am working on a web application which works on SQL sever back end as well as Sybase ASE 12.5.4 EA server. Our project main focus was to move everything to sybase backend.

Earlier there were 2 databases, the app was connecting to - db1 on sql server, and db2 on sybase. Now we have created a separate namespace within db2 in sybase. So application only connects with db2, but with different users and in separate schemas.

Application is in java and connecting to db server using jcon3 driver library. It is using SybXADataSource driver class (provided by jcon3 jar) to connect to the server. Till last week application was able to connect to the server, everything was working fine (though I must say that code is still not optimized to use connection pools etc., I am opening a connection, and closing it for every request).

For sometime, I have been facing an issue from the server- login failed, try again. In the server error logs I found it was throwing an error- "Error 1601 Severity 17 state 3: no user connections available to run the process" I checked for available connections (using sp_configure), allowed connections are 900, and total active connection at the time this error shows up is typically between 30- 100 (using sp_monitorconfig). Seems like this is well within limits.

Also yesterday, I did one more exercise, I restarted the server and logged in as sa from isql console only. Logged out and logged in again afimeter 20 minutes (no application connection was made), and isql login again gave this error. So I am inclined to think that something could be wrong with server configuration as well. Server is on linux red hat.

I have searched all the db forums and SCN website as well, and all of these refer to one resolution of increasing the number of connections, but as from my observation regarding that, I do not think it is an issue.

Any help would be greatly appreciated!!