The seller who results in short delivery is charged based on how the position is closed. There are 2 ways a position to be closed:

• Auction: First the exchange will try to close the position via auction where the seller is charged the difference between the auction settlement price and the original selling price plus auction penalty of 0.01%.
• Exchange: If it is unable to close the position via auction then the exchange will close out the position in spot market where the seller is charged the difference between the new settlement price and the original selling price.