Police tried to negotiate with him for hours on phone calls but that did not work out and Batham did not budge to release the children.
It took a team of counter-terrorism commandos and a number of police officers for the 9-hour standoff to finally come to an end in a SWAT-style raid that left Batham shot dead.
Later, he has not placed any demand in return for the release of the children but said that the villagers would have to pay the price of falsely implicating him in a murder case. A huge cache of arms and ammunition was also seized from his house godown where he had held the children hostage.
On Thursday, while addressing a rally in Uttar Pradesh, Chief Minister Yogi Adityanath lauded the teams for successfully carrying out the rescue operation in Farrukhabad where 23 kids had been held hostage in a house. However, she succumbed to her injuries.
The children were taken hostage on Thursday evening and were held captive for nearly eight hours. The police had to take her to safety and admit her in hospital.
"The accused was killed and there were about 23 children who were rescued safely", Additional Chief Secretary (Home) Awanish Awasthi told reporters at a hurriedly called press conference at 1.20 am.
In the exchange of fire, the captor's wife was injured, but none of the children suffered any injury. The police used drone cameras to monitor the rescue operation.
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Chief Minister Yogi Adityanath monitored the situation in Farrukhabad, which is almost 200 km from state capital Lucknow.
Agarwal said he was drunk when the police encounter occurred.
The wife of the suspect also died after she was lynched by a mob of angry villagers when she attempted to flee the spot.
Earlier in the morning, more than 15 children who were held hostage at a house in Farrukhabad were safely evacuated by police.
Agarwal said he was a suspect in a murder case and had been freed on bail by a court.
He said Batham was demanding a ransom of 10 million rupees (around $140,000) for each child, and asking for the charges against him to be dropped.
According to India Today, Batham had earlier sent a letter to the local district magistrate, complaining about the lack of toilet facilities in his house, and saying he had been denied government housing. He is believed to have fired six shots from inside the building.