File Server Resource Manager e-mail Notification not sending e-mails to users when quota is exceeded!

Dear Experts,
I have set up e-mail notification for when users exceed their storage quota threshold they would receive an e-mail warning. The test e-mail sent from FSRM configure Options works. Event 12304 is logged in the event viewer regarding the fact that the user has exceeded the threshold. The quota also stops the users from saving when they exceed the limit. However, the e-mail notifications is not firing off.
Please see full text of error logged in event viewer below:

A File Server Resource Manager Service email action could not be run because the specified SMTP server is invalid.  Use the FSRM management console to specify and test a valid SMTP server.

Operation:
   Running email action.
   Quota limit reached.
   Processing File Server Resource Manager event

Context:
   Action type: Email Action
   Action name: Email Action0
   SMTP server: exchange1.ABC.local
   Mail-from address: File Server SERVER2 Storage Administrator FSRM@server2.ABC.local
   Mail-reply-to address: File Server SERVER2 Storage Administrator FSRM@server2.ABC.local
   Mail-to address: Diskquota@ABC.org.uk;SarkozyB@ABC.org.uk
   Mail-CC address:
   Mail-BCC address: SarkozyB@ABC.org.uk
   Mail subject: Quota limit exceeded
   Mail message text: User ABC\SarkozyB has exceeded the limit for the quota on D:\ABCUsers\SarkozyB on server SERVER2. The quota limit is 2048.00 MB, and 2044.79 MB currently is in use (99% of limit).

You will soon not be able to save any work in your userarea. Kindly delete unnecessary files to free up space.
   Quota path: D:ABCUsers\SarkozyB

Error-specific details:
   Error: IMessage::Send - cdoNTLM, 0x8004020e, Cannot modify or delete an object that was added using the COM+ Admin SDK

   Error: IMessage::Send - cdoAnonymous, 0x8004020e, Cannot modify or delete an object that was added using the COM+ Admin SDK



Gospodin RasputinIT ManagerAsked:
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Vishal BreedProgram ManagerCommented:
This needs to be rectified at your email server.

The recepient of the email has exceeded the quota and by default behaviour - message will not be delivered!!

In Exchange 2003 server (considerign you have Windows 2003); you can refer that user properties from AD Console - User Properties - Exchange General - Storage Limits.

If "Use Mailbox Store Default" option is set; please check the properties of Mailbox Store where this user resides - on Limits Tab.

Or check if any Mailbox Policy is configured to limit the storage.
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Gospodin RasputinIT  ManagerAuthor Commented:
Sorry Vishal,
The quota I am talking about is on users home drives (not on exchange mailboxes).

In fact, these users hardly have anything in their mailboxes.
Thanks.
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Gospodin RasputinIT  ManagerAuthor Commented:
Folder Quota e-mail notification
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Gospodin RasputinIT  ManagerAuthor Commented:
I added a connector specifically for my Storage server, otherwise there is no way a non-messaging server could send e-mails.
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Windows Server 2003

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