Hi Krishna,
Unfortunately, you have discovered a SharePoint limitation. Dynamic permissions within a form library are not supported. Here are some ideas to workaround this gap:
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Create a separate view in your form and use User Roles and Open Rules (Tools -> Form Options -> Open and Save) to switch views if opened by someone who isn't in the right group to view the form in it's current state. You'll have to save state in the form and use that on open. I also recommend disabling File->Save/SaveAs to prevent people from saving locally.
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Create two form libraries, publish the form tempalte to both and change the form submit to vary based on state.
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Use Qdabra's DBXL Web service to save to SQL DB. Create a dataview on top of the Web Service that shows users documents assigned to them. DBXL handles dynamic document level permissions, so this scenario is no problem. Free trial available via Qdabra->Products->DBXL.
Obviously, #1 is the lowest cost approach. #2 is kind of a hack but could work if your workflow is simple and non-reversible. #3 is the ultimate long-term solution since you have many more options and can control things dynamically.
Hope this was some help.