Is background verification done by third party organization reliable? Is it required to authenticate the information / report provided by them? Why?

The back ground verification would involve multistage approach, right from collecting the documents of all the employers Offer and relieving letter. If it is a registered organisation with NASSCOM them there are no hurdles in the process and you can rely on them. 

I do not agree with you as third party will conduct your organization sensative information. HR department can collect this information and it is a best practice.