Questioning employees suspected of fraud

What is the legal position in the following situation - when you question your subordinate employee suspected of fraud and he refuses to answer. Later, when he is sued in court, he gives an answer which you feel he should have mentioned to you earlier.

Under section 116 of the Evidence Act, the court is allowed to draw adverse inferences. The court will have to take into account all facts including any excuses and explanations from the employee about his earlier failure to answer. If it thinks fit, the court can presume that the employee is lying in court and his answer is something concocted by him recently. If on the other hand, the employee gives a good explanation which the court believes, then his failure to answer will not be held against him.

There are no hard and fast rules as to the court's response in such situations but the court is expected to take into account normal human responses in such situations.