Say that! The culprit is not your contactor alone but the 2HP motor. Please don't jump to the conclusion that all 2HP motors are bad. It is just that when it switches on, there is big dip in the mains. And possibly all your problems start there.

> See if you can switch over to a SMPS for the MCU supply instead of the linear stuff. The SPMS will mostly have a better performance with such wildy varying mains voltages.

> Install a 3 phase snubber very near to the motor terminals. And resist the idea to use ordinary 0.01 uF capacitors eventhough they may be rated for 600V ac. Capacitors used for such suppressing applications will need to have a dielectric that is flame retardent and self quenching type if you want absolute safety against flame outs. They are coded as X2 type.

> Now your Neutral and earth wire come under focus. If you have a common line running for both Neutral and Earth, your noise immunity is already compromised. You may care to check a few postings in this forum on this topic.

Raghu