Hi Karthi,
Hotspots are only triggered when the viewpoint enters that area, not other objects. You will need to create a timer loop and manually check how far the avatars are from each other. Hear is some sample code that shows the basic idea:
Code:
import vizmat
AVATAR_DISTANCE = 2
def mytimer(num):
distance = vizmat.Distance(a1.get(viz.POSITION),a2.get(viz.POSITION))
if distance < AVATAR_DISTANCE:
print 'Avatar1 and Avatar2 are near each other'
Good luck!