Why is the MIS or CO position not auto squared off?

Zerodha squares off open intraday positions at or after the auto-square off timings. To learn more, see What are the auto square-off timings for open intraday positions?

If an intraday position or an MIS trade is not squared off on the same day due to reasons such as link or system failure, stocks hitting circuit limits, or any risks associated with internet/wireless-based trading that may occur at the end of the client, Zerodha, or the respective exchange, it will be treated as a Cash and Carry (CNC) or NRML position. Consequently, it will be carried forward to the next trading day.

If such a situation arises, it will be the responsibility of the client to close the position. Zerodha reserves the right to square off any such position at its discretion, even without a margin call, if the required balance is not available in the Zerodha account.