@Taranjeet Malik Thanks for reaching out. Based on the information you provided, it seems like the issue is related to the SSL certificate validation when accessing the BizTalk API endpoint through APIM.
When you access the BizTalk API endpoint directly from the VM in the VNet and bypass the certificate validation, you are able to get a success response. However, when you try to access the same URL through APIM, you get an error indicating that the SSL/TLS secure channel could not be established.
This error typically occurs when the SSL certificate presented by the server is not trusted by the client. In this case, it is possible that the self-signed certificate used by the BizTalk server is not trusted by the APIM instance.
To resolve this issue, try Importing the self-signed certificate used by the BizTalk server into the trusted root certificate store on the APIM instance. This will allow the APIM instance to trust the certificate presented by the BizTalk server/Add a valid trusted root CA certificate that resolves to a Microsoft Trusted Root Participant list.
try and let me know incase of further queries, I would be happy to assist you.