The Prophet صلى الله عليه وسلم said : By Him in Whose hand is the life of Muhammad, he who amongst the community of Jews or Christians hears about me, but does not affirm his belief in that with which I have been sent and dies in this state (of disbelief), he shall be but one of the denizens of Hell-Fire. ( Sahih Muslim )
I was speaking with a well known student of knowledge and he told me that this applies to all Non Muslim people who live among us. Then he told me that every non Muslim in this world knows about Islam but rejects to follow it.
When I heard this from him , I got confused because personally I know many non Muslims , yes they know only very little about Islam but not clearly . If they did not know about what is the Islam properly and what is the Tawhid etc. then how can these people be punished on the Day of Judgement .
Also , many non Muslim suffer everyday without food and shelter , what is their situation on the Day of Judgement ?
The reason I am asking this question is , I live in a non Muslim society and here there are many non Muslims who don't have enough knowledge about Islam .
And I hear from some other students of knowledge that they say Allah عز وجل will never punish anyone until the proof of Islam is clarified to them . Is this true ?
The words of the brother referred as a student of knowledge in your question are not correct , because he generalized what has been specified by the evidences and this is how we find it in the statements of the scholars as well .
His mistake is that he took the Hadith upon its apparent meaning without combining it with the others evidences from the Book and the Sunnah , so it contradicted other evidences in the same chapter as indicated by the scholars.
Therefore , your sound Fitrah (human nature) that follows justice and hates injustice did not accept it , and this is true .
In summary , there are two issues with what the brother said . The first is about punishment to the one whom Islam has reached but in a way that is not clear . The second issue is about the claim that there are no people today in the world who has not heard of Islam due to the existence of these widespread internet !
With regards to the first issue , the correct understanding of the Hadith is that the statement of the Prophet صلى الله عليه وسلم “ hears about me ” means a hearing which explains Islam truly in a clear way ( without any misrepresentations or misconceptions ) and not just a mere hearing .
Hence , scholars like Shayk Ibn Uthaymeen , may Allah عز وجل have mercy on him said :
the apparent meaning of the Hadith is the mere hearing , because he صلى الله عليه وسلم said ( hears about me.. ) but this general wording is specified and so the meaning becomes a hearing that clarifies the matter , because of the saying of Allah عز وجل
(( وَمَاۤ أَرۡسَلۡنَا مِن رَّسُولٍ إِلَّا بِلِسَانِ قَوۡمِهِۦ لِیُبَیِّنَ لَهُمۡۖ )) ( And We sent not a Messenger except with the language of his people, in order that he might make (the Message) clear for them. )
And Allah عز وجل knows best .