This hadith is about those 12 hypocrites who tried to kill The Holy Prophet in the valley of UQBA while The Prophet was on his way to Medina. The Holy Prophet told their names to his righteous companion Hudhaifa Yamani who kept their names secret. Those names remained hidden among the Companions and The Holy Prophet who was true picture of mercy did not punished them.
Although there were lots of other hypocrites among the Companions. The Holy Quran says about those hypocrites (9:101) ” And among those around you of the bedouins are hypocrites, and [also] from the people of Madinah. They have become accustomed to hypocrisy. You, [O Muhammad], do not know them, [but] We know them. We will punish them twice [in this world]; then they will be returned to a great punishment.”
Our Sunni fellows still insist all Companions are righteous, follow anyone you will guided. The above verse invalidates their theory. They don’t know if they pick a companion to follow him, he could be hypcrite according to the above verse!
Some times our Sunni fellows tell us stories that actually all the Companions are righteous but those who did bad stuff, they are automatically out of companionship.They are no more Companions !
But this hadith of Sahih Muslim invalidates their theory. The Holy Prophet counted those bad people as HIs Companions even they tried to kill The Holy Prophet. This narartion invalidates the Sunni definition of Sahabi.
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