Speech perception is a specialised aspect of general human ability,the ability to seek and recognize patterns.The present study investigates the auditory discrimination of the three form of laterals /l/ that are dental,retroflex,palatal in native and non native children and adults. Malyalam has all three forms of laterals on the other hand Hindi does not have the palatal and retroflex form.Malyalam was the native language and Hindi was the non native language.Four groups of normal hearing subjects participated in the study.Group I consisted of 10 native Malyalam speakers in age group of 4-6 years, Group II had 10 native Malyalam speakers in age group of 19-21 years,Group III consisted of 10 Hindi speakers in the age group of 4-6 years and Group IV consisted of 10 Hindi speakers in the age group of 19-21 years. The material consisted of 42 bisyllabic meaningful Malyalam words with all three types of laterals in word medial and word final positions. Two sets of words were made.There were 16 words in Set I (Palatal-Retroflex) and 26 words in Set II (Retroflex-Dental form).Each word was paired with the same word also, each word with Palatal lateral was paired with the retroflex form.In Set II each word with retroflex form was paired with same word and also, with similar word with dental form.A total of 8 word pairs were made. These word pairs were iterated thrice and randomised to make 24 and 39 word pairs,respectively.A 22 years old female Malyalam speaker uttered these word pairs with a interpair interval of 5 seconds. All the word pairs were audiorecorded and these formed the stimuli. Subjects were tested individually.They were audiopresented with the word pairs and were asked to identify the two words in a pair as 'Same' or 'Different' and to respond on a binary forced choice format provided. The responses of the subjects were tabulated and percent 'same' - 'Different' was calculated and Native Malyalam adults had 97% and 89.22% in Set I and Set II,respectively.Native Malyalam speaking children had 95.41% and 91.27% in Set I and Set II, respectively. Non native adult speakers had 83% and 79.77% in Set I and Set II,respectively. Non Native children had 71% and 55% on Set I and Set II,respectively. The results indicated that the discrimination was poor in non native speakers compared to native speakers. Also, non native children had poor discrimination compared to non native adults. The results did not support the Universal Theory.