Your friends are incorrect.
You don't HAVE TO submit your passport to the country of your application. If the Principal applicant is in Canada, they can submit it to Ottawa. If he/she is in India,they can submit to NDVO.
I know this because I got my PPR while I was in Canada I had the option of submitting it for stamping in either places- India or Canada.
The PPR email said the following:
4) Submitting your passport(s) in Canada (CPC-O)
If you and all the accompanying dependents on your application are currently in Canada and plan to be in Canada for at least three months, you may submit your passport(s) to the Case Processing Centre – Ottawa (“CPC-O”). You are required to send your passport(s) together along with a copy of this letter by mail or courier to the following address.
(address was given below)
Hope this was useful.
Please pass the info onto your friends so that everyone has the correct information and it causes less stress!
I was unsure about this myself and it really worried me before someone else on this forum clarified it for me!
Good luck!