Doesn't not blocks viruses...why?

Not sure if all are familier with eicar test virus, but i believe its used to test if ur av is running and working fine

http://www.eicar.com/anti_virus_test_file.htm

When i tried to download the file, Avast blocked it BUT There are 3 more links which are on secure sites (https) When i click on them it lets me save the file to desktop, open the zip file and dbl click on the exe file. Doesn’t blocks!!

Its should have been blocked before downloading or atleast when i dbl clicked it to open it?

Good.

avast can’t scan secure HTTPS traffic as it is encrypted.

Yes, it should… Which is your sensitivity level for Standard Shield?
Are you set to scan open/create/modify files too or only when running them?

It was set to default setting, I moved the slider to ‘high’
Scan files on open is checked
Scan created/modified files is checked too

Now although its still NOT detecting when i dbl click the zip file but it does when i dbl click exe file inside it.

First, there’s no EXE file in the ZIP - just COM file.
Next, even with the sensitivity set to Normal, the file should be detected on execution. Isn’t it?
Did you try to decompress the COM file e.g. to desktop? And then run it (double-click it) from there…?