  We investigate the evolution of a FRW model fuelled by a modified Chaplygin
gas with an equation of state $p = A\rho -\frac{B}{\rho^\alpha}$. An attempt is
made here to constrain the free parameters of MCG model through the wellknown
contour plot technique using observational data. The permissible range of
values of the pair of free parameters are determined to study the viability of
cosmological models \emph{vis-a-vis} observational results. Aside from allowing
the desirable feature of \emph{flip} of the sign of deceleration parameter we
also find that the transition from the decelerating to the accelerating phase
occurs at relatively low value of redshift in accordance with the observational
prediction that the acceleration is a recent phenomenon. It is found that the
effective acoustic speed may become imaginary depending upon the initial
conditions signalling that perturbations associated with instability sets in
resulting in structure formation. As one considers more negative values of $A$
the \emph{flip} in sign is delayed resulting the density parameter to change
fast. Again it is found from the contour plot that compatibility with
observational results is admitted with a value of $A$ which is very near to
zero or a small negative number.
