HI, Umesh,
When there an no nonlinear loads present and PF capacitors (PFC) are used to raise the displacment PF (DPF) above about 0.95 lagging, the issue is usually resonance.
You indicated the DPF objective is unity. Attempting to maintain above about 0.95 lagging DPF with PFC is often dangerous and results in exactly what you have stated.
PFC are designed to switch slowly. The result is that at times the DPF goes leading. If curcumstances are correct resonance with the utility PFC can occur. One sympton is that the mains voltage rises before the resonance begins.
As a general rule, Schnieder Electric dos not recommend using PFC to correct for DPF above 0.95 lagging. We suggest using an active harmonic filter. Active harmonic filters (AHF) provide DPF correction by injecting phase shifted current electronically. This eliminates the possibility of resonance.
You can use PFC to correct to 0.95 lagging and supplement the rest to unity with AHF.
Please contact your Schneider Electric sales and aplication center in India for assistance.
Thanks for writing and good luck.