Is she currently living in Dubai and planning to remain until passport request comes (which of course no-one knows how long it might be).
The short answer is hypothetically it can be done anywhere there is a visa office and/or visa application centre. (Which surely there is in UAE)
But: getting through and arranging it might be difficult. If she truly does expect to be in Dubai, she should update her address through webform. And then contact the visa office (embassy/consulate) when the PPR comes, IF it doesn't already have isntructions on how to submit in Dubai.
Given all that and if she plans to return to India before coming to Canada, it might be preferable to do the passport submission in India. Or it might not. Up to you to decide.
(You almost certainly will not be able to arrange this in advance, unless she happens to know someone at the consulate or something, and will have to deal with it when the PPR comes)