1) your wife can submit application for re verification by regd post
2) Track the delivery. The status would change to 'verification in progress' from 'adverse report'
3) if your wife has suppressed material facts show cause notice would be issued as to wehy passport should not be impounded
4)If you are certain why an adverse report has been generated, you could send an application through registered post to the RPO explaining why police submitted an adverse report.
If the RPO finds your reply satisfactory, your letter would be treated as a request to reinitiate the police verification process. You could track the status of your case online through your file number.