diff --git a/lib/Runtime/ByteCode/ByteCodeEmitter.cpp b/lib/Runtime/ByteCode/ByteCodeEmitter.cpp
index b52b157ebe9..4f7ed55b5fa 100644
--- a/lib/Runtime/ByteCode/ByteCodeEmitter.cpp
+++ b/lib/Runtime/ByteCode/ByteCodeEmitter.cpp
@@ -4219,7 +4219,20 @@ void ByteCodeGenerator::StartEmitFunction(ParseNode *pnodeFnc)
         {
             bodyScope->SetMustInstantiate(funcInfo->frameSlotsRegister != Js::Constants::NoRegister);
         }
-        paramScope->SetMustInstantiate(!pnodeFnc->sxFnc.IsBodyAndParamScopeMerged());
+
+        if (!pnodeFnc->sxFnc.IsBodyAndParamScopeMerged())
+        {
+            if (funcInfo->frameObjRegister != Js::Constants::NoRegister)
+            {
+                paramScope->SetMustInstantiate(true);
+            }
+            else
+            {
+                // In the case of function expression being captured in the param scope the hasownlocalinclosure will be false for param scope,
+                // as function expression symbol stays in the function expression scope. We don't have to set mustinstantiate for param scope in that case.
+                paramScope->SetMustInstantiate(paramScope->GetHasOwnLocalInClosure());
+            }
+        }
     }
     else
     {
diff --git a/test/es6/default-splitscope.js b/test/es6/default-splitscope.js
index 22510ff1651..6399a859f2e 100644
--- a/test/es6/default-splitscope.js
+++ b/test/es6/default-splitscope.js
@@ -186,6 +186,14 @@ var tests = [
         };
         f13();
 
+        var f14 = function f15(a = (function() {
+                return f15(1);
+            })()) {
+                with({}) {
+                };
+                return a === 1 ? 10 : a;
+        };
+        assert.areEqual(10, f14(), "Function expresison is captured in the param scope when no other formals are captured");
     }
  },
  {