string filename = @"d:\balamurali\bb.txt";
System.Security.Permissions.FileIOPermission permission = new
System.Security.Permissions.FileIOPermission(System.Security.Permissions.FileIOPermissionAccess.Read ,filename);

try
{
         permission.Deny();
         System.IO.StreamReader sr = new System.IO.StreamReader(filename);
         MessageBox.Show(sr.ReadToEnd());

}
catch (System.Security.SecurityException ex)
{
         MessageBox.Show("Permission to read the file was denied " );
}
catch (System.Exception ex)
{
         MessageBox.Show(ex.Message);
}