One of my friends heard this thing, and I want to know whether it is right or wrong: Sitting in the squatting position while eating food and drinking water is from the Sunnah?

All perfect praise be to Allah, The Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad is His slave and Messenger. 

It was reported that the Prophet sat in a squatting position. Qaylah bint Makhramah, may Allah be pleased with her, said, "I saw the Prophet sitting in a squatting position. When I saw the Prophet humble in his form of sitting, I trembled with fear." [Al-Bukhaari in Al-Adab Al-Mufrad and Abu Daawood in As-Sunan]

Also, Abu Umaamah, may Allah be pleased with him, narrated, “The Prophet used to sit in a squatting position.” [At-Tabaraani]

However, we are not aware of any clear evidence that indicates that it is desirable to sit in a squatting position when eating or drinking in particular, and it is proven in the Sunnah that the Prophet ate while he was sitting on his buttocks. Anas, may Allah be pleased with him, narrated that “he saw the Prophet eat some dates while sitting on his buttocks, with his knees bent vertically.” [Muslim]

It is likely that squatting has the same meaning as sitting on one’s buttocks, as interpreted by some jurists.

Abu ‘Ubayd said about the meaning of squatting, “Squatting is sitting on one’s buttocks while putting one’s arms around one’s legs…” It was also said, “It is the way a man sits on his buttocks.” [Abridged]

The Sunnah also indicates that it is desirable to drink while not standing without specifying that the recommended manner of sitting is squatting.

The Sunnah also indicates that it is permissible to drink while standing sometimes, as in the hadeeth of ‘Amr ibn Shu'ayb, from his father, from his grandfather, who said, “I saw the Prophet drink while standing and while sitting down.” [At-Tirmithi]

For more benefit, please refer to fatwa 89900.

Allah knows best.