/etc/dovecot-used-quota.conf

# used password for vmailadmin in iRedMail.tips file #
connect = host=localhost dbname=vmail user=vmailadmin password=r21JQMc59LNkVNmvAjvjKbLBdSzY8E
map {
    pattern = priv/quota/storage
    table = quota
    username_field = username
    value_field = bytes
}
map {
    pattern = priv/quota/messages
    table = quota
    username_field = username
    value_field = messages
}

dovecot.log with "mail_debug=yes" enabled

Oct 19 19:19:26 IMAP(falcon@example.com): Info: Loading modules from directory: /usr/lib/dovecot/imap
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Module loaded: /usr/lib/dovecot/imap/lib10_quota_plugin.so
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Module loaded: /usr/lib/dovecot/imap/lib11_imap_quota_plugin.so
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Effective uid=501, gid=501, home=/var/vmail/vmail1/example.com/falcon/
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Quota root: name=user backend=dict args=:proxy::quotadict
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Quota rule: root=user mailbox=* bytes=10485760 messages=0
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Quota warning: bytes=8912896 (85%) messages=0 command=/usr/local/bin/dovecot-quota-warning.sh 85
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Quota warning: bytes=9437184 (90%) messages=0 command=/usr/local/bin/dovecot-quota-warning.sh 90
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Quota warning: bytes=9961472 (95%) messages=0 command=/usr/local/bin/dovecot-quota-warning.sh 95
Oct 19 19:19:26 IMAP(falcon@example.com): Info: dict quota: user=falcon@example.com, uri=proxy::quotadict, noenforcing=0
Oct 19 19:19:26 IMAP(falcon@example.com): Info: maildir: data=//var/vmail/vmail1/example.com/falcon//Maildir/:INDEX=//var/vmail/vmail1/example.com/falcon//Maildir/
Oct 19 19:19:26 IMAP(falcon@example.com): Info: maildir++: root=//var/vmail/vmail1/example.com/falcon//Maildir, index=, control=, inbox=//var/vmail/vmail1/example.com/falcon//Maildir
Oct 19 19:19:26 imap-login: Info: Login: user=<falcon@example.com>, method=PLAIN, rip=127.0.0.1, lip=127.0.0.1, secured
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Namespace : Using permissions from //var/vmail/vmail1/example.com/falcon//Maildir: mode=0700 gid=-1
Oct 19 19:19:26 IMAP(falcon@example.com): Info: Disconnected: Logged out bytes=274/2503

corresponding "sieve.log" file

Oct 19 19:16:26 deliver(raptor@example.com): Info: Loading modules from directory: /usr/lib/dovecot/lda
Oct 19 19:16:26 deliver(raptor@example.com): Info: Module loaded: /usr/lib/dovecot/lda/lib10_quota_plugin.so
Oct 19 19:16:26 deliver(raptor@example.com): Info: Module loaded: /usr/lib/dovecot/lda/lib90_sieve_plugin.so
Oct 19 19:16:26 deliver(raptor@example.com): Info: auth input: home=/var/vmail/vmail1/example.com/raptor/
Oct 19 19:16:26 deliver(raptor@example.com): Info: auth input: quota_rule=*:bytes=10485760
Oct 19 19:16:26 deliver(raptor@example.com): Info: Quota root: name=user backend=dict args=:proxy::quotadict
Oct 19 19:16:26 deliver(raptor@example.com): Info: Quota rule: root=user mailbox=* bytes=10485760 messages=0
Oct 19 19:16:26 deliver(raptor@example.com): Info: Quota warning: bytes=8912896 (85%) messages=0 command=/usr/local/bin/dovecot-quota-warning.sh 85
Oct 19 19:16:26 deliver(raptor@example.com): Info: Quota warning: bytes=9437184 (90%) messages=0 command=/usr/local/bin/dovecot-quota-warning.sh 90
Oct 19 19:16:26 deliver(raptor@example.com): Info: Quota warning: bytes=9961472 (95%) messages=0 command=/usr/local/bin/dovecot-quota-warning.sh 95
Oct 19 19:16:26 deliver(raptor@example.com): Info: dict quota: user=raptor@example.com, uri=proxy::quotadict, noenforcing=0
Oct 19 19:16:26 deliver(raptor@example.com): Info: maildir: data=//var/vmail/vmail1/example.com/raptor//Maildir/:INDEX=//var/vmail/vmail1/example.com/raptor//Maildir/
Oct 19 19:16:26 deliver(raptor@example.com): Info: maildir++: root=//var/vmail/vmail1/example.com/raptor//Maildir, index=, control=, inbox=//var/vmail/vmail1/example.com/raptor//Maildir
Oct 19 19:16:26 deliver(raptor@example.com): Info: dict quota: user=raptor@example.com, uri=proxy::quotadict, noenforcing=0
Oct 19 19:16:26 deliver(raptor@example.com): Info: sieve: user's script path /var/vmail/sieve/example.com/raptor/dovecot.sieve doesn't exist (using global script path in stead)
Oct 19 19:16:26 deliver(raptor@example.com): Info: sieve: using sieve path for user's script: /var/vmail/sieve/dovecot.sieve
Oct 19 19:16:26 deliver(raptor@example.com): Info: sieve: opening script /var/vmail/sieve/dovecot.sieve
Oct 19 19:16:26 deliver(raptor@example.com): Info: sieve: executing compiled script /var/vmail/sieve/dovecot.sieve
Oct 19 19:16:27 deliver(raptor@example.com): Info: Namespace : Using permissions from //var/vmail/vmail1/example.com/raptor//Maildir: mode=0700 gid=-1
Oct 19 19:16:27 deliver(raptor@example.com): Error: Internal quota calculation error
Oct 19 19:16:27 deliver(raptor@example.com): Error: sieve: msgid=<eecba1af73ccf2527444c557010baec7@example.com>: failed to store into mailbox 'INBOX': Internal error occurred. Refer to server log for more information. [2010-10-19 19:16:26]
Oct 19 19:16:27 deliver(raptor@example.com): Error: sieve: script /var/vmail/sieve/dovecot.sieve failed with unsuccessful implicit keep

[root@mail ~]# dovecot -n
# 1.2.14: /etc/dovecot.conf
# OS: Linux 2.6.18-164.el5 i686 CentOS release 5.4 (Final)
log_path: /var/log/dovecot.log
protocols: imap imaps managesieve
listen(default): *
listen(imap): *
listen(managesieve): 127.0.0.1:2000
ssl_cert_file: /etc/pki/tls/certs/iRedMail_CA.pem
ssl_key_file: /etc/pki/tls/private/iRedMail.key
login_dir: /var/run/dovecot/login
login_executable(default): /usr/libexec/dovecot/imap-login
login_executable(imap): /usr/libexec/dovecot/imap-login
login_executable(managesieve): /usr/libexec/dovecot/managesieve-login
mail_uid: 501
mail_gid: 501
mail_location: maildir:/%Lh/Maildir/:INDEX=/%Lh/Maildir/
mail_debug: yes
mail_executable(default): /usr/libexec/dovecot/imap
mail_executable(imap): /usr/libexec/dovecot/imap
mail_executable(managesieve): /usr/libexec/dovecot/managesieve
mail_plugins(default): quota imap_quota
mail_plugins(imap): quota imap_quota
mail_plugins(managesieve):
mail_plugin_dir(default): /usr/lib/dovecot/imap
mail_plugin_dir(imap): /usr/lib/dovecot/imap
mail_plugin_dir(managesieve): /usr/lib/dovecot/managesieve
lda:
  postmaster_address: root
  auth_socket_path: /var/run/dovecot/auth-master
  mail_plugins: sieve quota
  sieve_global_path: /var/vmail/sieve/dovecot.sieve
  log_path: /var/log/sieve.log
auth default:
  mechanisms: plain login
  default_realm: example.com
  user: vmail
  passdb:
    driver: sql
    args: /etc/dovecot-mysql.conf
  userdb:
    driver: sql
    args: /etc/dovecot-mysql.conf
  socket:
    type: listen
    client:
      path: /var/spool/postfix/dovecot-auth
      mode: 438
      user: postfix
      group: postfix
    master:
      path: /var/run/dovecot/auth-master
      mode: 438
      user: vmail
      group: vmail
plugin:
  quota_warning: storage=85%% /usr/local/bin/dovecot-quota-warning.sh 85
  quota_warning2: storage=90%% /usr/local/bin/dovecot-quota-warning.sh 90
  quota_warning3: storage=95%% /usr/local/bin/dovecot-quota-warning.sh 95
  quota: dict:user::proxy::quotadict
  quota_rule: *:storage=100M
  expire: Trash 7 Trash/* 7 Junk 30
  expire_dict: proxy::expire
  auth_socket_path: /var/run/dovecot/auth-master
  sieve: /var/vmail/sieve/%Ld/%Ln/dovecot.sieve
  sieve_dir: /var/vmail/sieve/%Ld/%Ln/
dict:
  quotadict: mysql:/etc/dovecot-used-quota.conf
  expire: db:/var/lib/dovecot/expire/expire.db

Thanks for your rapid responses, I also referred maxie_ro's tutorial during the whole time.

But my problem is the mail is not getting delivered at all

"/var/log/maillog"

Oct 19 10:19:00 mail postfix/pipe[3781]: 1A3023901EB: to=<raptor@example.com>, relay=dovecot, delay=251, delays=251/0.05/0/0.05, dsn=4.3.0, status=deferred (temporary failure)

[root@mail ~]# mailq
-Queue ID- --Size-- ----Arrival Time---- -Sender/Recipient-------
AFC4C3901EA     1594 Tue Oct 19 16:14:34  falcon@example.com
                                                           (temporary failure)
                                         postmaster@example.com
                                         raptor@example.com

-- 2 Kbytes in 1 Request.

After solving this only we can get to the next step i.e worrying about quota.

"The table entries will get updated only when an user receives or deletes a message. So it might take some time for the table to fill up. You might get some oddities in the mean time (including negative usage quota)."

However if I revert back to old plugin "Maildir" everything works fine.