my wife staying at his fathers home and blackmailing

If you wish for a better future of your children, we suggest you should visit a marriage counselor with your wife and solve your issues amicably as divorce of parents have a very negative effect on children.

Now regarding your query,

Assuming you are hindus,

If you wish to continue the marriage and want your wife to return to your matrimonial home then,
you can file a case under section 9 of the Hindu Marriage act which deals with restitution of conjugal rights.

Section 9 of the Hindu Marriage Act 1955 has been explained below for your understanding:

Section 9. 

Restitution of conjugal rights - When either the husband or the wife has, without reasonable excuse, withdrawn from the society of the other, the aggrieved party may apply, by petition to the district court, for restitution of conjugal rights and the court, on being satisfied of the truth of the statements made in such petition and that there is no legal ground why the application should not be granted, may decree restitution of conjugal rights accordingly.

But, if you don't wish to continue your marriage you can file for divorce under section 13 of the Hindu Marriage Act

Grounds for Divorce under the Hindu Marriage Act, 1955 are as follows:

Adultery / Cruelty / Desertion / Conversion to another religion / Mental Disorder / Leprosy / Venereal Disease / Renunciation / Not Heard Alive / No Resumption of Co-habitation.

And according to your situation your divorce case would come under section 13(1)(ia) of the Hindu marriage act.

Along with the divorce case, a case for child's custody can be filed and after considering the facts of the case the court will decide to whom should the custody be given for the betterment of the children.