Selling Of Recievable Shares

Dear all. I have a query. Suppose i bought some shares of a given stock early in the morning and the ones i got is from the person who short sold it. The person from whom i bought, forgot to square it off on the same day. As a result all his short sold shares went for an auction. Now the next day realizing the share prices went up, i sold these shares from my receivables. But since i wont be getting delivery of those shares, i too wont be able to deliver them. So will my shares also go for an auction? Or things will be settled off between the person i bought from and person i sold to?

Yes your shares will go to auction since you were not able to deliver them.

They wont be settled between the person you bought and the person you sold since those are two separate transactions.