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Ad-hoc networks are an emerging area of mobile computing and an efficient paradigm for multicast communication. The security challenges faced by the network due to their inherent unique characteristics are exacerbated in case of multicast communication. Group communication in ad hoc network is susceptible to a host of outsider and insider attacks. The security solutions proposed for the outsider attack cannot be directly applied to the insider attack due to their disparate behavior. The compromise of the authenticated and trusted node in the network by Sybil attack poses serious implications. Online auction has been taken as a case study to probe the effect of Sybil attack in the multicast communication, as it supports the formation of secure group. Sybil attack is an attack where an adversary illegitimately forges the identities of the other genuine node by disabling them after launching a DoS attack on it. Iolus framework, a supporter of creation of secure multicast distribution tree with group security agent (GSA) is deployed with MAODV as the underlying protocol. The impact of the compromise of the GSA in the multicast tree by Sybil attack is analyzed with packet delivery ratio as the performance metric. Theoretical based simulated graphs are presented to analyze the performance of the ad hoc network in the presence and absence of Sybil attack. Existing solutions have been discussed and their limitations are addressed by tweaking them to propose a CNIRL (compromised node identity revocation list).