Hi All,
Appreciate your assistance. The issue has been fixed.
Since the SEPM server is downloading updates from LUA servers, it did not have direct internet connection. It was going through Proxy to the internet.
I reinstalled the LiveUpdate and then provided direct internet acccess for the SEPM server. Then I run luall.exe and it downloaded all the updates successfully.
However, once I removed the direct internet access it was again giving the same error "LiveUpdate encountered one or more errors. Return code = 4" while performing a liveupdate from SEPM console.
I then found the following link http://www.symantec.com/connect/forums/liveupdate-express-issue. Accordingly I replaced all the Product.Inventory.LiveUpdate files with the same files from the secondary SEPM server.
Though it is strange, everything went well and the liveupdate did run successfully. I observed it for one day and now it is downloading the updates successfully.
I have one more query here.
When I compare the downloads on both the servers I see a lot of additional components in the one that was having problem. Below are the screenshots:


Please let me know if this would cause any issue as the contents are different.
Thank you.
Faiz