This thesis communicates a new approach for the future Library system using secure NFC technology. Today we can use NFC and Android based mobile phones to build modern library system in which user will instead of standing in the queue can directly borrow and return books. The NFC technology which will use in this thesis is capable of storing small amount of information. This storage will be used for maintaining the books records. Although the NFC works in close proximity but still there are possibilities of attacks. Due to contact less communication the victim cannot notice the attacks. There are different types of attacks which can occur including modification of data and listening to the communication by unknown user. Therefore in this thesis the author will look into how one can protect the system from these kinds of at-tacks. The motivation behind the thesis is to introduce scalable cloud based infrastructure as a backbone Library. Current systems using bar code technology are not secure. Therefore an infrastructure needs to be built which includes cloud based server for key distribution and data storage. Furthermore, this thesis includes a study of the encryption and decryption schemes for close proximity communications. A new novel algorithm has been introduced and implemented as an encryption scheme for this thesis work. The Huffman scheme has been modified and 16 bit keys have been used for the key exchange. The new approach is compared with the existing techniques and found that it is reliable as compared to other techniques.