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In this paper a novel mutual authentication and key management protocol is proposed, which satisfies most of the security requirements like mutual authentication, confidentiality, integrity for one hop communication in mobile adhoc networks. In this novel protocol, there is no pre-key distribution and key storage for making protected data transmission in vulnerable wireless link. Common secret key is generated only between the communicating peers on the fly to provide secure communication simultaneously, while performing authentication. The proposed protocol does not require an on-line centralized authority in the active phase of the network. We use a hybrid cryptographic technique, which is a combination of RSA and elliptic curve cryptography (ECC) to achieve efficient mutual authentication and key agreement. Proposed protocol requires reasonable resources in terms of computation and communication overhead and provides higher security, which will be suitable for value added applications, using MANET nodes.