I am posting a complete example which I finally got working. Here I am reading in a file rooms/rooms.txt
from a script rooms/rooms.js
var fs = require('fs');
var path = require('path');
var readStream = fs.createReadStream(path.join(__dirname, '../rooms') + '/rooms.txt', 'utf8');
let data = ''
readStream.on('data', function(chunk) {
data += chunk;
}).on('end', function() {
console.log(data);
});