Known issue. I asked their customer support and they said that buying equities from sale proceeds is a "feature" offered by other brokers and as per them settlement is next trading day only.

But the fact is that ALL brokers except Definedge offer this so called "feature".

Surprisingly, Definedge offers margin to buy equities from sale proceeds on the same day if you are doing Momentum Investing from their Momentify platform.

Due to these double standards I stopped trading with them.