Actually anything can be possible, but I have never heard of anything like this before. So I don't think it is possible unless of course the sleepwalker did not use his or her legs.
Is it possible to be paralyzed from the waist down and sleep walk?
No, not possible. Maybe they sleep dragged themselves around.
From your comments ... You are probably being scammed. And if he's getting disability payments for the injury, he's likely committing a felony. And if other people have seen him walk, it's only a matter of time until the insurance company finds out - and you have to pay back all that money, plus lawyer's fees, fines, penalties - and possible jail time. (If you witness it, and don't report it - YOU are a conspirator, and subject to the same penalties he is.)