How to setup grub fallback functionality for Centos-7

Question

I have multi-boot environment

Centos-7.1(Kernel-4.2.6 on /dev/sda3) Centos-7.1(kernel-3.10 on /dev/sda2).

I want to boot through Centos-7.1(kernel-3.10 /dev/sda2) on failure of Newly installed (Centos-7.1(Kernel-4.2.6 on /dev/sda3) ) OS

I have following disk-partition structure.

sda      8:0    0     8G  0 disk 
├─sda1   8:1    0 573.5M  0 part /boot
├─sda2   8:2    0   2.3G  0 part /   
├─sda3   8:3    0   2.3G  0 part /
├─sda4   8:4    0     1K  0 part 
├─sda5   8:5    0   982M  0 part [SWAP]
└─sda6   8:6    0   1.9G  0 part /var/log/storage
sr0     11:0    1  1024M  0 rom 

I have modified /boot/grub2/grub.cfg configuration file for grub fallback functionality

default=saved
timeout=5
fallback 1

In /etc/default/grub:

GRUB_DEFAULT=saved
grub2-set-default 0

With above settings I am facing following error: "system is failing to load default and fallback entries"

Note:

[root@localhost ~]# cat /etc/os-release 
NAME="CentOS Linux"
VERSION="7 (Core)"
ID="centos"
ID_LIKE="rhel fedora"
VERSION_ID="7"
PRETTY_NAME="CentOS Linux 7 (Core)"
ANSI_COLOR="0;31"
CPE_NAME="cpe:/o:centos:centos:7"
HOME_URL="https://www.centos.org/"
BUG_REPORT_URL="https://bugs.centos.org/"
CENTOS_MANTISBT_PROJECT="CentOS-7"
CENTOS_MANTISBT_PROJECT_VERSION="7"
REDHAT_SUPPORT_PRODUCT="centos"
REDHAT_SUPPORT_PRODUCT_VERSION="7"

Grub Info:

[root@localhost ~]# grub2-install -V
grub2-install (GRUB) 2.02~beta2