Executing the contract

what happens if option seller is ready to take delivery for puts he sold but the option buyer is not ready or capable? and same about the calls. if a call option seller is ready to sell the shares but the buyer is not?

Depends on your order type.
if it’s market order it will execute on nearest bid/ ask.
If it’s limit it will be in pending state till gets buyer.

If you’re participating in FNO, you have to agree to all TNC. No one can say they are “not ready” for taking/giving delivery on expiry. That would be a default.

Either square off your position before expiry or fulfill your obligations.

What happens to the contract if someone defaults. I’m asking about contact seller’s end.

Read this: https://zerodha.com/z-connect/queries/policy-on-settlement-of-compulsory-delivery-derivative-contracts-update-oct-2019

Zerodha will only allow you to carry contract to expiry if you have 100% margin or shares for physical delivery in your demat. I don’t know about other brokers …

Clearing corporations settle at Brokers level. The broker, in turn, has to recover money from the respective clients. So if the counterparty defaults, it is his broker’s headache to recover money from him. You will get your settlement.

Thank you, it helped

That’s the exact answer I was looking for. Thank You Sir