In view of this, can he apply for PR in the month of June 2020 with him being here in NZ but wife in India within a single application form submitted in NZ?
See above.
Whenever your friend meets the conditions for PR - ALL the conditions - he can apply for PR for himself and his wife, no matter where she is in the world.
Also, are passports needed at the time of his submission?
On the Process tab of the INZ factsheet
https://www.immigration.govt.nz/new-...t-visa#process, there are links to the relevant form and guide. The guide states (what always used to be the case) that passports should be submitted, but more recently, INZ has moved to a more flexible approach. This page
https://www.immigration.govt.nz/know...-question-7058 shows that they can quite often use JUST a certified copy, while reserving the right to need to see the passport in some cases before the final issue of the visa. Since he's not going to be able to apply till June, by then please God conditions may have improved, and his wife may be able to get a certified copy of her passport, if the husband doesn't have one. But all this will have to be worked out at the time, in the light of what offices are or are not open, and what the NZ government instructions are.