This paper widely deals with how data hiding can be more effectively done by encryption based hybrid image watermarking viz., DWT and SWD. Then an image encryption concept is used to protect the image contents. The basic idea of the proposed technique consist of three phases. First phase includes fusing of multiple watermark images with wavelet fusion to produce fused watermark and in the second phase hybrid DWT-SVD based algorithm is used to embed fused watermark on the original image. Finally, it encrypts the watermarked image into Visually Meaningful Encrypted Image (VMEI). The method not only enhances the capacity of the embedded information but also its robustness without affecting the perceptual quality of original image and security.