Yes I have tried and the code you have given works perfectly with the example above. Thanks very much :) I very much appreciate.

But the problem I am facing is In my File2, I have many more cases. For Example: string1 in File1 has two positions highlighted (1st and 3rd). However in File2, we may have more positions mentioned. For instance, we have "string1 20 A T" (3rd line), which is out of range and has to be omitted.

File1:

string1 (C)C(T)A 
string2 T(A)GG(A)GGG(G)
[download]

File2:

string1 1 C A 
string1 3 T C 
string1 20 A T  /* This is out of range, and has to be omitted*/
string2 2 A C 
string2 5 A T 
string2 9 G A 
string2 30 A C /* This is out of range, and has to be omitted*/
string3 9 G A /* This string is not there in the main file.. so has to
+ be omitted */
[download]

And in such case of File2, it`s not working. And I have a File2 of a billion lines.

Then, please, create a new question with better specification. It's still unclear whether the strings are sorted in your input files, and if yes, whether File2 is sorted by position for each string, etc. See Short, Self Contained, Correct Example.
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