Quality degradation of near-end speech in mobile communication or hands free devices is mainly due to acoustic echoes and background noises. The received far-end speech gets reflected from the obstacles present in the surroundings creating acoustic echo. All other disturbances from the near-end environment are considered as background noises. A novel acoustic echo suppression scheme using speech uncertainty in modulation domain (MD) is proposed in this paper. State of the art acoustic echo suppression systems are based on either time domain or frequency domain analysis. In recent times, the modulation domain analysis is popularly used in speech processing, as it captures the human perceptual properties. Modulation domain provides the temporal variation of the acoustic magnitude spectra which acts as an information bearing signal. In this paper, a new method is developed and implemented to model the echo path and estimate the echo in modulation domain. Echo cancellation is done effectively by manipulating the modulation spectrum and employing speech uncertainty. In this method, the microphone input is modelled as a binary hypothesis process and the gain function is modified accordingly. The proposed method shows better performance as compared to other competitive methods for acoustic echo suppression with no audible degradation in the near-end speech.