This was a quick fix which was noted in VMware vCenter server 6.5, it was not sending email alerts as we expected and configured in Alarms. We tried several attempts of troubleshooting and we could confirm that the alarm has setup correctly and no configuration issues.
I created a test alarm and set the notification to send as an email.

After digging in to the deep and search for a solution this was identified as a bug in the vCenter server 6.5. As a work around for this issue mail server settings had to change to a different values and reapply the setting was the fix, I know it’s not a quite troubleshooting.
To do that go to vCenter Server > Configure > General > Edit…

Change the “Mail server” to a dump value and apply the setting, then again change back to the correct server address. It fixed the issue and we expect VMware to fix these bugs for a greater experience and functionality of the vCenter 6.5 and not quite sure this has been fixed already in vCenter 6.7 releases.

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