The problem is that many characters (like space characters for example) are not allowed in URLs. So to use these characters you have to escape them. %20 is the escaped version of a space character. So it is absolutely correct to have %20 instead of spaces in an URL.
Look here for some more detailed explanation for the encoding:
If you don’t want such escaped characters in your URL, you will have to prevent that such characters (like spaces) are present in your path parameters. A very simple approach would be to replace spaces by underscores or something like this.