It is Khiyanah (Treachery) to confer Sanads to those who do not deserve them
Each and everyone is not capable of becoming a leader. You will also find a few who are not fit for it. Conferring sanad’s to such persons and saying that they are qualified and thereby making them leaders is actually khiyanat.
The Shar’ee status of conferring sanads and graduation turbans
It is the habit of certain Madaris, that once a student completes studying the prescribed books, they confer the sanad and graduation turban on him irrespective of whether he possesses the competency or not. However, it should be borne in mind that the conferring of this sanad and graduation turban is actually an attestation from the teachers to the masses that according to us this person is sufficiently qualified for you to refer to him for all your religious matter and masail and act upon whatever he says. In short, this person is capable of being followed with regards to your Deen. If this is the reality of this, then it will be Wajib for all the pre-requisites for a Shahadah (attestation/testimony) to be found in this. One of the main pre-requisites of a testimony is that the person who is testifying must have complete knowledge and full conviction from the matter regarding which he is testifying is one hundred percent correct. This is so that he does not get the sin of lying and deluding others so that others are not harmed by this testimony.
Similarly, the person who is being conferred with a sanad must be thoroughly investigated and checked whether he is capable of becoming a leader in religious affairs or not. If all the ‘Ulema present are satisfied and are pleased with his theoretical and practical condition, then this graduation is very good and also a good practice in that those who are aware will come to know the person who had qualified. However, this is on the condition that they (the madaris) do not indulge in too many formalities which will necessitate show and wastage (Israaf). However, if the person does not deserve to be graduated, then this conferring of graduation turbans should never ever take place, nor should the sanads be conferred to such a person. Apart from misleading the masses, what other benefit is there in this?
(Etiquette for Teachers and Students, compiled by Mufti Muhammad Zayd Mazahiri Nadwi from the writings of Maulana Ashraf ‘Ali Thanwi)