1. I think your wife also posted her query in either this or some other legal site where she stated that you are not in touch with your earlier fiancee now,
2. So, there is still some chance to convince her about your fiedelity after marriage with her,
3. Having affair before marriage is not a crime,
4. She has no ground to seek a decree of divorce for which she is asking for MCD,
5. If she does not want to stay with you you can not force her to do that. Better to agree for MCD but with out any alimony/compensation or accepting any charge on you,
6. If you do not agree for MCD, it will be difficult for your wife to get Divorce since there is no ground for her seeking divorce.