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Now a days data centers are migrating to the cloud. Security concerns become relevant as we outsource the storage of possibly sensitive data to third party cloud. Data stored in cloud need to be secured so that any malicious attacker colluding with any of the cloud servers does not gain any access to the secure information. Data need to be secured not only in the storage but also in the transit among authorized users. For secure data storage, encryption of the data is done using a powerful encryption mechanism. Encrypted data need to be shared among authorized clients. This is made possible through re-encryption. The re-encryption process converts the cipher text encrypted under the public key of owner of the data to a different cipher text encrypted under the intended receiver's public key. Automatic reencryption done too frequently will lead to wastage of resources. Existing Re-encryption algorithms shares their secret keys as shares in key servers. The re-encrypting authority should never get any information about the secret keys or the plain text during the process. The re-encryption is secure only if it does not reveal plain text in any of its intermediate stages. In the proposed method a novel re-encryption scheme is introduced that is secure against the collusion attacks and the re-encryption process does not reveal the plain text and secret keys anywhere in the middle of the process. The proposed method re-encrypts data only on demand thereby ensuring efficient resource utilization.