Why am I getting garbage values along with the result.

Quite a few reasons.
The first one is that you are trying to append two strings of equal length - 20 characters each - into the space allocated for one of them. If both len1 and len2 values add up to less than 20, you don't have a problem. But if they exceed that, then you are "running off the end" of one array or the other, and that's a problem because you don't know what memory you are using, so you don't know what you are overwriting. The compiler isn't going to tell you, and there is no standard that will define that because it's a bad, bad idea to do it in the first place! Define an output string area that is big enough to hold both strings, plus an extra character.

That extra character leads us to the second reason: strings in C are just an array of characters, terminated with a character containing a null value - '\0'
Since you don't copy or add a '\0' to the end of your output, when you print the string, it doesn't stop printing characters until it reaches a memory location that just happens to contain null. Hence you get a random number of random characters printed after your expected data.

Try

#include <stdio.h>

// merges strings 's1', 's2' into bufer 'buf', having size 'bufsize'
// returns 0 on success.
int merge( const char * s1, const char * s2, char * buf, size_t bufsize)
{
  const char * sa[2] = {s1,  s2 };

  size_t i = 0;
  size_t k = 0;
  for ( i = 0; i<2; ++i)
  {
    const char *p = sa[i];
    while ( *p )
    {
      if ( k == bufsize) return -1;
      buf[k] = *p;
      ++k;
      ++p;
    }
  }
  if ( k == bufsize) return -1;
  buf[k] = '\0';
  return 0;
}

// usage example
int main()
{
  const char * s1 = "foo";
  const char * s2 = "bar";
  char m[20];
  int rc = merge(s1, s2, m, sizeof(m));
  if (  rc )
    printf("unable to merge\n");
  else
    printf("merged string '%s'\n", m);

  return 0;
}