What is short delivery and what are its consequences?

A short delivery occurs when the exchange is unable to deliver shares purchased to your demat account due to the seller's failure to do so.

When will I get my stocks after a short delivery?
After the exchange holds an auction on T+2 day to procure short delivered shares and credit them to your demat account on T+3 day, the stock will appear in your account on T+4 day.
If the exchange is unable to obtain the shares through the auction, your trading account will be credited with cash based on the close-out price. See, When does cash settlement happen to close out short delivery?

In the case of physical settlement of F&O contracts where the seller fails to deliver stocks to the exchange, the exchange holds an auction on T+3 day and settles on T+4 day.

What causes this to happen?
Short delivery occurs when the seller (the person on the other end of your buy trade) fails to deliver the shares to the exchange in time for them to be credited to your demat account. This is common when intraday short positions cannot be closed due to illiquidity or when stocks reach an upper circuit.