Hybrid power filters have proven to play a vital role in harmonic elimination as well as reactive power compensation in power systems concentrated with highly nonlinear loads which has in the last decade increased due to industrial automation and use of power converters based systems in industries and our homes. This paper presents an approach to hybrid shunt active filter for compensating voltage/current harmonics in a three phase three wire system. It is a combination of a shunt C-type high-pass filter in parallel with an active filter controlled by a Neuro-fuzzy controller. The C-type will help to reduce component rating for active filter and suppress the overall filter resonance while active filter compensate for the low order harmonics. A three phase converter supplying highly inductive load has been chosen as a typical nonlinear load for which a shunt hybrid power filter comprising of a shunt C-type high pass passive filter and a shunt active filter is employed to improve the power quality at the source end. Extensive simulation has been carried out and results obtained from the proposed approach gives comparatively better total harmonic distortion (THD) value.