Hello Rahul Khinvasara,
I tested your project using the latest Q3 2009 SP1 (2009.3.9.1203), but I was not able to reproduce the issue. When I resize a window by a mouse drag operation, only this window is resized and no other window takes its size.
Please make sure that you updated the references of your application correctly. For additional information on how you can do this, please refer to the following help article: Application Upgrade
If this does not help, please describe in details the steps that you follow in order to reproduce the issue. This will allow me to investigate your particular case.
the Telerik team