Here is the result, Finally!!!

I checked it a friend who is ownig s Moto G and Flip Cover from Motorola.

The phone with Motorola flip cover was showing a different North and phone without Motorola flip cover was showing diffrent North (I guess correct north) when both phones were kept side by side.

Removed the flip cover calibrated the compass and same test was done again and both phones were showing same North.

Also the magnet in the flip cover is very strong. I am dropping my plan for flip cover now even if it is available for free, because putting a powerful magne on the phone that too 24x7 may not be good idea.