When misfortune befalls someone, people say that it is a punishment for his bad deeds. They are quick with comments like, 'had he done this, he would not have suffered such misfortune'. How far does this agree with Islamic teachings?

It is wrong to link anything that happens to man with what God determines for him. This is akin to judging God's actions and determining their causes. We should remember that the life of this world is a test for all of us. The test can take different shapes and forms. Some of us are tried with hardship, while others are tried with affluence.

The Prophet Sulaiman, peace be upon him, prayed to God to give him a sort of kingdom that no one else can have, and God granted him that, putting at his disposal certain powers that no one else ever controlled, such as the wind, speech of animals and authority over the jinn. He commented after a certain event in which his special powers were utilized:

"This is by the grace of my Lord, so as to test me whether I am grateful or ungrateful." (the Ants — “An-Naml” 27: 40)
He thus sums up the blessings God gave him, stating that they represented a test for him so that he would prove himself to be grateful. A test with hardship should prove whether we are patient in adversity. If we do, we stand to earn reward. If we were to describe a misfortune as God's punishment and a blessing as His reward, we are actually judging His actions. No human being may do that.