"Raj is very happy."
Translation:राज बहुत ख़ुश है।
It represents the 'ch' sound in 'loch' and is mostly found in words borrowed from Arabic/Persian. If I am not mistaken, it is represented by its own letter in the Urdu Nastaliq script. However, many Hindi speakers drop the dot (called 'nuqta') and pronounce/write it as ख (this is true for most dotted consonants with the exception of ड़ and ढ़).