If they can read  it in their browser  they can save it one way or another.

Create page which will send this file  to user. eg
/file_download.asp?filename=pic1.jpg, and check user  permissions in the
page.

And what permissions are you going to check. he said that they have read
permissions. Again once the pic1.jpg is displayed in a browser  even if there
arte no controls showing they cna still do a print screen.

I know, there are many ways user  can save the content of the file.

but is there any way we can disable the save as option on the browser.

Do a search at www.google.com and use "disable browser  functions" with the
quotes as your search criteria.