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BLE_L2CAP_CH_STATUS_CODE_NO_RESOURCES event is coming when when remote device sends l2cap connection request

I am using Nordic Serialisation library, with a nrf52480 chip as connectivity chip and a m4 arm core custom board as Application chip. I am able to establish gap connection from Remote device. But when remote device send request to connect to l2cap channel (with PSM value 129, just for experimentation purpose, I set this value), I am getting BLE Event BLE_L2CAP_CH_STATUS_CODE_NO_RESOURCES from connecticity chip. There is no L2cap request event or anything. .I am directly getting this event. I mean, 

BLE_L2CAP_EVT_CH_SETUP_REFUSED event with status as BLE_L2CAP_CH_STATUS_CODE_NO_RESOURCES.
I have set the l2cap connection configuration as below:
	ble_cfg_t ble_cfg;
	ble_cfg.conn_cfg.conn_cfg_tag = APP_BLE_CONN_CFG_TAG; /* = 1 */
	ble_cfg.conn_cfg.params.l2cap_conn_cfg.ch_count = 1;	
	ble_cfg.conn_cfg.params.l2cap_conn_cfg.rx_mps = 67;
	ble_cfg.conn_cfg.params.l2cap_conn_cfg.tx_mps = 67;
	ble_cfg.conn_cfg.params.l2cap_conn_cfg.rx_queue_size = 4;
	ble_cfg.conn_cfg.params.l2cap_conn_cfg.tx_queue_size = 4;
	err_code = sd_ble_cfg_set(BLE_CONN_CFG_L2CAP, &ble_cfg, NULL);
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