Dear friend, every paid employment is essentially a contract of service and is governed by the terms of the contract pertaining to every aspect of employment. When there is a difference of opinion regarding handling a situation that gives rise to a contentious issue due to the implementation of a particular condition of the contract of employment, both the employer and the employee must step into the shoes of the other and understand the relative gravity of their respective difficulties to prevent the situation from escalating into a conflict.
Resignation and the exit clause
Resignation is one of the modes of termination of the contract of employment and is governed by the exit clause contained therein. It imposes a responsibility on the resigning employee to comply with the exit clause to the extent practically possible. That's why a notice condition is introduced in the exit clause. At the same time, the employer has no discretion in accepting or rejecting a resignation other than on grounds like pending disciplinary proceedings or the urgency of completing an important project in which the resignee holds an irreplaceable role. Thus, it is the prerogative of an employee to decide whether to serve an employer or not for any reason of their own choice.
Maternity leave and resignation
In light of the increase in the duration of maternity leave due to recent amendments to the Maternity Benefit Act, 1961, the practical scenario indicates that many women employees fail to rejoin after the expiry of their maternity leave for various reasons. If the reason is solely post-natal care of the newborn baby, the employer can accommodate such a request for some time. Otherwise, resignation is the only option available to the employee, in which case the employer has to accept such resignation subject to the employee's compliance with the exit clause.
However, the options provided by the employer, as mentioned in your post, seem impossible given the situation. I believe that the perspective of the Co-founder of the company seems more influenced by the negative aspects of the situation. It might be better to request a meeting with him and try to persuade him to either allow your wife some additional months of leave without pay or to formally accept her resignation immediately.