Unfortunately, reporting managers often act as mere mouthpieces for top management to protect themselves. Therefore, do not take the words of your reporting manager for granted. What the manager is suggesting is essentially a forced resignation, which you are not obligated to accept if you do not wish to.
If you refuse to resign, the management might terminate your services for fabricated reasons. If you decide to resign based on your employability, it is advisable to review your appointment letter, confirmation orders, or the service regulations of your organization to understand the notice conditions for resignation.
Submit your resignation effective from a future date according to the maximum notice period stipulated. If you submit your resignation with immediate effect, they may ask you to pay the notice amount or deduct it from your Full and Final (F&F) Settlement amount.
Regards