Auction penalty on short delivery

I had a Bear put spread (Buy 3400 PE, Sell 3350 PE) on ADANIENT for 25 Jan expiry, but required margins increased on expiry day and I had negative margins. I added about 2L cash to my account, but was still left with -85k margin. I see my short 3350 put was squared off by Zerodha before market close and margin turned positive 84k. Would I get charged margin penalty in this case?
I understand that because I don’t have ADANIENT stocks in my demat account, there is a short delivery and auction penalty applies. But as Adani has tanked so much, wouldn’t it be easier for the exchange to buy the stock and deliver it to my counterparty? What is minimum auction penalty in % of contract value terms?

There won’t be any margin penalty in this scenario. Margin penalty is applicable only if there was shortfall in non-upfront margin. Explained in detail here.

In case of short delivery, the auction penalty can be up to 20%. You can learn more about short delivery in detail here:

Hey thanks for the response! So if I understand this well, Closing price on T (25 Jan) is 3388, shares are to be delivered at 3400. The auction range becomes 2710-4065. So my minimum penalty occurs when exchange can procure 250 ADANIENT from auction market at any price below 3388 and the penalty is (3400-3388)250=3000. Max penalty is 20% of contract value which is 0.2(250*3400)=1.7L

Is this understanding correct? @ShubhS9