So are we to not believe your first post in this thread, which would lead us to believe the phone was lost, which you reported lost? Only now you are saying the person returned the phone to you, so you actually let someone else use your phone.
As Chattanoogan correctly told you, the phone is Activation Locked and that is NOT blocked. The person you let use your phone erased the phone and set it up for themselves. You need to get them to unlock the phone or you won't be able to use it.
This is what they should have done before they gave you your phone back to you --> What to do before you sell, give away, or trade in your iPhone or iPad - Apple Support