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Seem a joke to me. The best way to handle this is talk to the wife. Because he is complaning due to ego of wife.(My guess)
From India, Bangalore
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Hello Jain,

Birthday celebration in your company, did it derive from convention or policy? If from convention, have a senior talk to him earnestly and begin looking for a replacement for the 'Director'. If it is derived from policy, how is it that at the Director level, he was unaware of it? Is your company's HR functioning effectively? Are you educating your employees sufficiently about company policies? Are employees well-informed about the policies? If the answer is affirmative for most of these questions, then I see a classical case of either a recruitment error or a mischievous employee. In either scenario, you need to stand your ground and start seeking a replacement. Additionally, put more effort into helping your employees better understand company policies.

Olarinde

From Nigeria
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Firmly tell him we can't do anything about the situation. It's his turn to leave or not to leave. Also, let him know that you want him to reconsider his stance, though, and you can't make any changes from your side.

Obviously, you are already doing the right thing by giving him time and a chance. Sometimes, a closed-door chat with subtle words might work, but otherwise, that's it. All the best.

From India, Madras
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Writing from across the border, I really don't know what the culture is in India vis-a-vis staffs' birthday celebrations in corporate settings. Back here, irrespective of the hierarchical status of an employee, such celebrations are the same - across the board.

You don't (meaning the boss in the present case) become the boss by trumpeting "I am the boss." You are the boss because of the specialized knowledge, skills, attitudes, and leadership qualities that you possess. In a team situation, you are one of the team - and the team culture permeates everywhere, including celebrations.

If he needs a glass cubicle for himself for such an occasion, he is unfit for his office.

Arif ur Rehman

From Pakistan, Karachi
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