Question:
What is the ruling for commemorating the birth of the Messenger, members of his household and the righteous?

Answer:
The birth of the Prophet is a mercy to the universe
The birth of the Prophet is a portal of divine mercy in the history of man. The Qur’an describes the Prophet as a ‘mercy to creation.” This mercy is unlimited for it includes teaching and guiding man to the straight path as well as promoting both his material and spiritual well being. As such, this mercy was not limited to those who lived at the Prophet’s time, but extended throughout history. This is attested by the Qur’an which, describing the Prophet’s mercy, states:
To them and to others yet to join them. [Qur`an 62:3]

Commemorating the birth of the Prophet is a manifestation of our love for him
Commemorating the birth of Prophet Mohammed, the seal of prophets and Messengers, is among the best deeds and one of the greatest acts which brings us closer to Allah. This is because it is a manifestation of our joy and love for the Prophet which is one of the principles of faith. It has been authentically reported from the Prophet that he said: "None of you will [truly] believe until I am dearer to him than his father, son and all mankind” [Bukahri]. Ibn Rajab said that love for the Prophet is one of the principles of faith and is parallel to our love for Allah, the Majestic. Allah threatened those who give precedence to things which are naturally dear to them such as relatives, wealth, and homeland over their love for Him and His Messenger. He said: Say [Prophet], ‘If your fathers, sons, brothers, wives, tribes, the wealth you have acquired, the trade which you fear will decline, and the dwellings you love are dearer to you than Allah and His Messenger and the struggles in His cause, then wait until Allah brings about His punishment. [Qur`an 9:24]
‘Umar told the Prophet, peace and blessings be upon him: “O Messenger of Allah!

You are dearer to me than everything except myself." The Prophet replied, “No! By He in whose hands is my soul, [you will not truly love me] until I am dearer to you than yourself." ‘Umar then said, “By Allah, now you are dearer to me than myself.” The Prophet, replied: “Now ‘Umar [you truly love me]” [Bukhari].

Commemorating the birth of the Prophet is equal to honoring him
Commemorating the birth of the Prophet is eqaul to honoring him, which is itself undeniably sanctioned in Islamic law since it is the first of all principles and their supporting pillar. Allah acknowledges the rank of His prophet, so He informed all creation of his name and advent and of his status and importance. The whole universe is eternally joyous with the light of Allah and His blessing upon His creatures.
Celebrating the birth of the Prophet is an essential part of honoring him.

Since the 4th and 5th centuries after the advent of Islam, our predecessors spent the night celebrating the birth of prophet Mohammed through many kinds of acts bringing them closer to Allah. They held banquets, recited the Qur`an, made dhikr [making remembrance of Allah] and recited poetry and eulogies on the Prophet. This was recorded by several historians, including scholars of hadith such as Ibn al-Jawzi, ibn Kathir, ibn Dihya al-Andalusi, ibn Hajar, and Jalal al-Din al-Suyuti, may Allah have mercy upon them. The majority of the scholars from among our predecessors and their successors clearly stated the legitimacy of celebrating the noble birth of the Prophet.

Books on the subject
A group of scholars authored books commending the commemoration of the birth of the Prophet and used authentic evidence to demonstrate its recommendation, leaving no doubt to any sane person on the permissibility of the practice of our righteous predecessors. Mentioning valuable remarks on the topic, Ibn al-Hajj described the advantages of celebrating the birth of the Prophet in great length in his book Al-Madkhal the subject of which was the condemnation of innovations for which there is no evidence in Islamic law. Likewise, Imam al-Suyuti wrote a separate essay which he entitled Husn al-Maqsid fi 'amal al-Mawlid.

Etymology of the word Ihtifal (commemoration)
In the Arabic language, the meanings of 'ihtifal' 'commemoration' include among others, to flow copiously, to assemble, and congregate. The meaning of the word in this context does not depart much from its linguistic meaning since the purpose of commemorating the birth of the Prophet is to gather the masses for making dhikr, singing praise, extolling the Prophet, holding banquets as a charity in the way of Allah and to demonstrate our joy for the Prophet’s birth.

Means of celebration
People customarily celebrate this occasion with buying sweets and making gifts of them. Gift giving is a recommended act in itself, and there is no evidence for its permissibility or its lack thereof concerning a particular time. Furthermore, if we add to this other righteous objectives such as bringing joy to the members of one's household and maintaining the ties of kinship, it becomes even more recommended and meritorious, especially if it is an expression of one's joy at the birth of the Prophet. This is because the means have the same rulings as the ends and opinions maintaining its prohibition or which seek to prevent its celebration are considered reprehensible and excessive restrictiveness.

Some people doubt the permissibility of celebrating such occasions due to their absence in the early centuries of Islam. Even if this were true, it does not justify preventing the celebration of the birth of the Prophet. No person could doubt the joy of those who lived at that time, may Allah be pleased with them, over [the birth of the] Prophet.

There are many ways to express joy, which is not an act of worship in itself, and there is no objection to choosing one or the other; therefore expressing joy at the birth of the Prophet in individual ways is permissible. Our predecessors celebrated the birth of the Prophet in various ways. They held banquets, recited the Qur`an, made invocations, and sang poetry and eulogies on the Prophet and his household.