He was the member of All-India Muslim League and a participant of the Pakistan Movement with the ultimate aim of creating the Muslim-majority areas of British India.

Chaudhry Niaz Ali Khan was born in Mahilpur, Hoshiarpur District, Punjab in the British Indian Empire on 28 June 1880.

While serving in the Public Works Department in 1901, Chaudhry Niaz Ali Khan oversaw the designing and construction of the 80 km long Pathankot-Dalhousie Road.

In 1935, Chaudhry Niaz Ali Khan retired from government service and his career in civil engineering and returned to his vast estate in Jamalpur to manage his agricultural lands, which spanned 1,000 acres (4.0 km2).

Chaudhry Niaz Ali Khan was a philanthropist by heart and generously spread charity around him and donated money to various social causes and endowed various charitable and educational institutions with a share of his wealth, especially in the form of land.

[1] Chaudhry Niaz Ali Khan's reputation as a Muslim philanthropist soon caught the attention of South Asia's premier Muslim poet, philosopher and thinker, Allama Muhammad Iqbal who advised Chaudhry Niaz Ali Khan to set up a research institute for Islamic learning that would lead to the education, enlightenment and empowerment of the Muslims of India who, since the fall of the Mughal Empire and the advent of the British Raj, had increasingly regressed economically, socially and politically and were trailing Hindus in education.

In 1936, on the advice of Allama Muhammad Iqbal, Chaudhry Niaz Ali Khan founded and established the Dar ul Islam Trust, which was registered under the Societies Registration Act, 1860, and donated 66 acres (27 ha) of land from his vast 1,000-acre (4.0 km2) estate known as the "Jamalpur Fruit Farms" in Jamalpur (5 km west of Pathankot) in Gurdaspur District, Punjab State, India for the established of the first Dar ul Islam Trust Institute.

Allama Muhammad Iqbal nominated Ghulam Ahmed Pervez, an eminent civil servant and Islamic scholar.

It was, therefore, at the recommendation of Ghulam Ahmed Pervez that Chaudhry Niaz Ali Khan wrote to Maududi and invited him to join the Dar ul Islam Trust in Pathankot.

The prospect of heading a well-endowed Islamic research institute with a custom-built campus near the picturesque foothills of the Himalayas was an attractive one for Maududi and he agreed.

[1] At the time, it was unknown to both Ghulam Ahmed Pervez and Chaudhry Niaz Ali Khan that Maulana Maududi was against the two nation theory in the form it was being popularized and the methodology adopted by the Muslim League, which would eventually lead to Chaudhry Niaz Ali Khan parting ways with Maududi.

[1] Chaudhry Niaz Ali Khan, however, wanted Allama Iqbal to personally approve the appointment of Maududi at Dar ul Islam.

[6] In 1938, Maulana Maududi, then aged 35, arrived at Dar-ul-Islam in Pathankot and remained there for some time under the patronage of Chaudhry Niaz Ali Khan before founding the religious political party Jamaat-e-Islami in Lahore in 1941.

This was due to Chaudhry Niaz Ali Khan's disagreement with Maulana Maududi's and the Jamaat-Islami's ideology and approach on a number of issues, particularly on his opposition to the Muslim League's methodology.

Chaudhry Niaz Ali Khan's belief in Iqbal's dream for a separate homeland for Muslims in India and his support for the idea of Pakistan led to increased distance between him and Maulana Maududi.