He was born in village Ukhai, 6 k.m. from Siwan district on 2nd August 1842 in his parental house. The ancestors of Khuda Baksha were in service of King Alamgir. They were doing the work of book keeping and writing records of the kingdom.
His father was a famous advocate in Patna. He was very fond of collecting hand written books and he was spending big part of his income on purchasing such books. His father brought Khuda Baksh to Patna from Ukhai. He passed his matriculation with very good marks from the Patna High School in 1859. His father sent him to Calcutta for higher studies. But he could not adjust himself to the new environment and he often had health problems. He returned to Patna and started studying law in Patna University. He completed his law education in 1868 and started practice at Patna. In short time, he became a well known advocate.
His father expired in 1876, but in his will he has asked his son to establish a public library with the collection of his books nearing around 1700 and making more contribution to the collection. His father aim was to benefit the people of his precious collection.
In 1877 he became the 1st Vice Chairman of the Patna Municipal Corporation. For his contribution in the area of education and literature he was awarded the title of "Khan Bahadur" in 1891. In 1903 he was honored with the title of "C.I.B."
The biggest achievement of Khuda Baksh was creating a public library from the precious collections of his father and making his own valuable collection of books, which was later named as "Oriental Public Library" He started constructing a separate special building for the library, which was completed in two years. The library was inaugurated by the Lieutenant Governor of Bangal Sir Charles Elliot in 1891. At that time it was having around 4000 hand written books in the library.
In 1895, he was appointed as a Chief Justice of High Court of Nizam of Hyderabad. After staying there for about three years, he again returned to Patna and started the practice. But soon he suffered from the paralysis and he confined his activity only to the library. Due to his illness, he could not carry out his activities. He was given Rs. 8000 for paying his debts and made the secretary of the library and Rs. 200 was sanctioned as a pension to him. He couldnot recovered from the paralysis and the great son of Siwan died on 3rd August 1908.