If a trader didn’t close his position before the expiry day then they had to do a .physical settlement. I am just wondering what if the trader didn’t oblige
If a trader doesn’t close the position out, usually the broker squares the position off automatically if there isn’t sufficient money to take physical delivery, or securities in Demat to give physical delivery. If the broker doesn’t square off, the physical delivery will happen and in the case of buy positions, there will be an interest charge if money is not available and a huge risk of auction penalty if securities are not available in case of sell positions.
Btw an incident from many years back, one of my friends who used to trade commodities decided to trade Pepper with an offline broker. The broker didn’t square off and my friend was assigned to take delivery of a few thousand kilos of Pepper from Kochi. 
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