Notice period

I am not known about the agreement between your wife and the company but don't worry, you do not need to serve any notice period. If they move the court, which definitely they would not do, I suppose this three months notice period shall be termed unlawful but the outcome depends upon several other facts and circumstances. 

Escalate the matter to the Managing Director/CEO/Board of the Company and they would sure waive the Notice Period. The Management has the discretion ( on just and fair grounds) and the grounds of plea in you case is a perfect justification for waiver of notice. vasudevan

Notice period can be waived if appointing authority approves.Request for waivar and give alternative suggestion that to recover amount from your retiral benefit or leave encashment and gratuity(assuming that worked for more than 5 years)See Comanys attitude is good and professional.You can not expect everything free.When you both are or were earning it is not impossible for you to manage such money.It will be not fair on the part of you to move court as in future after your child is grownup and goto school you may again wish a job at that time your reputation with present company will be considered an asset.

Dear sir

we have to go through the appointment letter which is a mutual contract determining the rights of the company and its employees.  if your wife has agreed to serve 3 months notice period or payment in lieu of 3 months then she will have to honour it.  she can also request the company to waive some period say 50% which shall be their entire discretion.  till then her other dues may not be cleared