The District of Columbia has agreed to pay $162,500 to the sister of a Vietnam veteran who died at D.C. General Hospital where he was being treated for gunshot wounds suffered during a scuffle with a police officer.

The payment was agreed upon after several days of emotional testimony in a wrongful death lawsuit in D.C. Superior Court regarding the death of John D. Allen. Allen, 36, died Aug. 24, 1982, when a blood clot from his leg lodged in his lung, blocking a blood vessel, according to a medical examiner's report.

Allen had been shot in the left shoulder four days earlier when a struggle ensued after police were called by Allen's aunt to her home at 81 New York Ave. NW. Allen, who lived in the house, apparently was undergoing one of the "psychotic episodes" that had plagued him since his return from Vietnam, his lawyer, John W. Karr, said yesterday.

The settlement occurred shortly before the government was scheduled to present its case Wednesday. The suit was brought by Mary M. Davis, Allen's sister.

Lawyers from the D.C. corporation counsel's office argued that Allen had received adequate medical care at D.C. General and that the accident was a "freakish" one.

According to court documents, Allen spent three days immediately after the shooting at Washington Hospital Center, where he was treated for wounds in the shoulder. While there, Allen had started walking under doctors' order to expedite his recovery and prevent clots. He appeared to be recovering satisfactorily, Karr said.

On the fourth day, Allen was transferred to D.C. General, according to court documents. Once there, Karr argued, Allen did not receive appropriate medical care. He said Allen's legs were not examined, a standard practice that would have shown a predisposition to blood clots, and that Allen was not allowed to exercise.

Instead, Karr said Allen was tied to a bed and remained immobile. When Allen was released from the restraint to go to the bathroom he swung his legs to the floor. At that time, Karr said the blood clot in his leg rushed to his lung and Allen died.

District lawyers said the medical examination was completely adequate. They said Allen had to be restrained because he had allegedly assaulted a police officer and to protect the safety of others. Allen was in a room with a nonprisoner patient.