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We have 4 document libraries in a site (Doc1, Doc2, Dco3, Doc4). There are around 20 users in the site and out of them for 4 users we want contribute permisions on the Doc2 and read only permission for the rest of the site. Similarly other 4 users we want contribute permissions on the Doc3 and read only permission for the rest of the site. What would be the best way of doing it?

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The best approach is to create Sharepoint Groups for these users. Break the permissions inheritance on the desired document libraries (Document Library Settings, Permisions, Actions -> Edit Permissions, click OK) and set the permissions as you want them to.

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