Why there is "Dr." before name of PhD degree holder? Is it right practice to place "Dr." before name of PhD degree holder? What is reason for placing such "Doctor" label before name?
Yes, this is the right practice.

A PhD degree is a "Doctor of Philosophy", and the appropriate formal title for that is "Doctor". That there are other professions that can be called "Doctor", for example holders of an MD degree, is simply because there are multiple fields one could be a Doctor of.