These dgca checks can indeed be logged as PIC only in America. I being an FAA instructor, have done that for someone I did the dgca recency requirements for. It's 'Acting PIC' time(which is what you'd do for the commercial requirement on a multi, due to insurance purposes of course). So when the candidate is Acting PIC, it is NOT logged as Dual time. It is merely signed in the remarks column indicating the signature and number of the instructor.
As for the DGCA verifying from the flight school, even if they do this with schools in America, there is nothing such as the 'Journey Log book' like in Canada. So, the chief pilot merely confirms the details requested by the dgca as he/she has already verified this in the numerous number of documents/"transcripts" that were already attested by him/her.
Lastly, I'd agree with all here that it is the most inefficient, uneducated and non-informed civil aviation organization!