There's no point of what permissions the file /root/users.txt have. It just contains entries which get appended in /etc/passwd file.
Command /usr/sbin/newusers is owned by root user, thus you cannot simply use it while using your own or any other user account, irrespective of what's your current working directory i.e. you're in /root directry or in some other directory.
Actually when root invokes this command, it creates a lock file in /tmp, so until execution of this command gets finished, no one else can use this command or can edit /etc/passwd file. This is built-in feature of this command.
In your case, you need to become root to invoke this command. To do this, use:
example-machine$ su - root
example-machine# newusers /root/users.txt
To check creation of users, use:
example-machine# id -a <username>