I have to set up my New Living cum Dining room. Drawing is as attached. I do not have a sofa and I do not plan to buy any. Instead, I will prefer to buy some light weight chairs. I already have a 6 seater Dining table, a single bed and 3 old trunks of my MIL which I plan to put somewhere in this room and cover up with some padding above it and a good bed cover or Table cover. Please suggest me a good idea.

can you attach some photos, and maybe flesh out your question a bit?

Would you consider building a closet that would hold the platform on which your mattress would be placed? The outer side of the platform could have drawers or doors to the storage units under the platform. This kind of enclosure would work better for a twin bed than for a double, but it would provide a place where the bed can be concealed during the day time. Then, if you could allow a path between the bed enclosure and sofa, you could have the sofa face the dining table, or you could place the dining table at a right angle to the end of the sofa.

To decorate any room in the house furniture is the most important element. choose the furniture according to your style and personality. there are many types o bed are available for the bedroom like king bed, queen bed, canopy bed, bed with headboard and foot board, loft bed, storage bed etc. select bed according the theme of the bedroom and need. for living room or hall you have many option. you can arrange sectional, sofa, loveseat, recliner, seating bench etc. see decoration idea http://www.theclassyhome.com/comersus_listItems.asp?idCategory=348&Furniture=Living+Room+Sets