Code

 // restricting lanes/stages handles so that only height can be adjusted by user.
                        // if first stage encountered: allow only bottom center handle
                        if (i == 0)
                        {
                            tempShape.EnabledHandles = AdjustmentHandles.ResizeBottomCenter;

                        }
                        // if last stage encountered: allow no handle
                        if (i == (extVarStages-1))
                        {
                            tempShape.EnabledHandles = AdjustmentHandles.None;
                        }
                        // for all other stages allow only bottom center handle
                        else
                        {
                            tempShape.EnabledHandles = AdjustmentHandles.ResizeBottomCenter;
                            //tempShape.EnabledHandles = AdjustmentHandles.ResizeTopCenter | AdjustmentHandles.ResizeBottomCenter;
                        } 

Code

// Horizontal Lanes: create lanes based on stages

            // iterate while 'extVarStages' is reached
            for (int i = 0; i < extVarStages; i++)
            {
                // defining y-axis with 'rectangleHeight' predefined variable
                // and multiplying it by the next lane to be created by sequence.
                // e.g if height is 2 then second shape would be at 2*2=4, 3rd would be 2*3=6
                // this would ensure they are placed sequentially one after another.
                ShapeNode tempShape = diagram.Factory.CreateShapeNode(0, rectangleHeight * i, diagramWidth, rectangleHeight);

                // set type of shape to rectangle to resemble a lane
                tempShape.Shape = Shapes.Rectangle;

                // name the shape concatenating the number of stage at end
                tempShape.Text = "Stage " + (Convert.ToInt32(i) + 1).ToString();

                // set Id of shape to that later on if for instance one lane is resized, another can be refered to for adjustment.
                // call the Id same as the text of the shape.
                tempShape.Id = "Stage " + (Convert.ToInt32(i) + 1).ToString();

                // set ZIndex so that the lane stays at bottom at all times below other shapes on diagramView.
                tempShape.ZBottom();

                // set color of shape
                tempShape.Brush = new MindFusion.Drawing.SolidBrush(System.Drawing.Color.GreenYellow);

                // disable self loops on lanes //TEST

                //// prevent links on lanes/stages
                //tempShape.AllowIncomingLinks = false;
                //tempShape.AllowOutgoingLinks = false;


                // attaching to previous stage and restricting handles if first or last stage
                // check if shape is greater than 0 (means greater than Stage 1)

                if (i > 0)
                {

                    // get stage number of current stage (add by 1 as stages start from 1)
                    int currStageNum = i + 1;

                    //Shape prevStage = Shape.FromId("Stage " + (currStageNum - 1)) as Shape;

                    //ShapeNode pNode = ShapeNode.f

                    // reference previous shapenode
                    ShapeNode prevShapeNode = diagram.FindNodeById("Stage " + (currStageNum - 1)) as ShapeNode;

                    // attach current shapenode to previous shapenode
                    tempShape.AttachTo(prevShapeNode, AttachToNode.BottomCenter); // TEMP COMMENTED!!!

                    // attach previous shapenode to current shapenode
                    //prevShapeNode.AttachTo(tempShape, AttachToNode.TopCenter);


                }

                // restricting lanes/stages handles so that only height can be adjusted by user.

                // if first stage encountered: allow only bottom center handle
                if (i == 0)
                {
                    //tempShape.EnabledHandles = AdjustmentHandles.ResizeBottomCenter;  // TEMP COMMENTED!!!
                    tempShape.EnabledHandles = AdjustmentHandles.ResizeBottomCenter;

                }
                // if last stage encountered: allow top center handle
                else if (i == (extVarStages - 1))
                {
                    tempShape.EnabledHandles = AdjustmentHandles.ResizeTopCenter;
                }
                // for all other stages allow only bottom center handle and top center handle
                else
                {
                    tempShape.EnabledHandles = AdjustmentHandles.ResizeBottomCenter | AdjustmentHandles.ResizeTopCenter;
                    //tempShape.EnabledHandles = AdjustmentHandles.ResizeTopCenter | AdjustmentHandles.ResizeBottomCenter;
                }
            }