[quote user="sowmya dantuluri"]Is there any MDL or C++ API to remove or heal such overlapping boundaries?[/quote]
Without knowing more about structure of data it's hard to guess, but MicroStation in general does not provide any complex set of topology check and correction tools, as they are typical more for GIS, not for general CAD.
What can help is to try to re-create the shape using Crete Region tool using Flood mode (which is roughly equal to mdlRegion_floodFill). You can try it manually and if it will work, to implement it in MDL in the next step. You should be aware some limitations exists, e.g. it creates a new element, so if attributes or linkages exist, they have to by copied by the code.
With regards,
Jan