Install older kernel in a server and made it the default boot option in grub

is it possible?

Switching between recent closely related kernels is possible - that is kernel versions 2-3 different. Any larger than this and you can run into graphical issues because todays graphics cards and drivers often need a similar kernel to work with.

I know this because my laptop is an intel based laptop. I'm running 12.04 and running the hardware-enablement stack.

Currently I'm using the 13.10 saucy stack but with the raring kernel (kernel 3.8 vs 3.11 in saucy). This works ok. When I switch to my 3.2 kernel, my laptop boots to a black screen.

Given that you are using a server, I imagine you are not running any graphics stuff anyway - or maybe just framebuffer type graphics. Thus, the graphics issues should not (in theory) apply to you.

kernel 3.2

Kernel 3.2 is the long-term supported kernel (LTS) - so it will receive the support the longest (i.e. a total 5 years from 12.04 release).

As long as you are not running any kernel device dependent software, there will be no impact in running an older kernel.

The other aspect you should consider is security updates. By pinning and holding your kernel you'll need to manually manage your kernel updates.

pinning

As to your queries - the procedure you have outlined is correct.

You may wish to consider not "pinning and holding". Instead of booting using the first kernel found in the "Previous Kernels" GRUB, you could instead boot to a named kernel

i.e.

change GRUB_DEFAULT="2>0" to GRUB_DEFAULT="2>Ubuntu, with Linux 3.2.0-24-generic"

You can obtain the grub label via the command fgrep menuentry /boot/grub/grub.cfg