Unauthenticated senders not allowed

Edit Subject

I have a setup of two application servers and both works with a load balancer. In both the server I am trying to use sendgrid SMPT server. Using one server I am able to send email via sendgrid but from other server it is not able to send email. Which is very strange because both the servers are using same configuration and sendgrid authentication details.

Server1: abc.com - successfully able to send email

Server2: zzz.abc.com, Error message : "Cannot receive from specified address : Unauthenticated senders not allowed"

One thing I'd like to note here is, There is a local setup of mail server on zzz.abc.com also which we are using for some other purposes.

So the problem is I am able to send email using abc.com server, but not able to send email using zzz.abc.com.

Please help.
Prashant