File replication in distributed environment has been discussed by many researchers, but the issues like confidentiality and integrity of files during replication are rarely focused, when deployed in the cloud environment. Distributed computing started with the cluster followed by the grid and is now era of cloud computing, where most of the services are accessed, by few clicks. In cloud, services are invoked on demand and there is no need of dedicated resources. It demands the availability of resources (i.e. logical resources), in order to fulfil the user requirements. To make this feasible, on-demand availability of Logical Resources (LR) is preferred. This work proposes security mechanisms to fully secure the on-demand logical resource (file) replication scheme through the use of symmetric and asymmetric keys as they are required for fulfilling the confidentially, integrity, availability requirements of the system efficiently. It is also responsible for replicating the file, from one peer server to the other peer server, having the trust level above the predefined threshold value.