The person who has sold the shares to you has defaulted due to short delivery. The exchange will buy the shares from the auction market on T2 and they’ll settle it into your Demat on T3. Since you’ve sold the shares on T2 only, the shares will be available in your account on T3 and you won’t default.
But there is a slim chance that the exchange was unable to buy the shares from the auction market, and so instead of the shares, they will settle the funds back to your account. In this case you will be charged an auction penalty for the sell trade on T2 but the chances are very very slim.
