This issue was resolved using these steps.
- Close open relay on exchange.
- make sure all filtering methods are applied on SMTP Virtual server.
- The user had 2 other connectors configured there. Deleted those connectors / disabled POP3 connector.
- Test for open relay using
www.mxtoolbox.com- Made sure exchange server IP is not in the list of Accepted Domains ***
Cleaned SMTP queue by Delete with no NDR