Error in loading rails


I have checked out the clean code from production which is up and
running. I am facing issue to get the rails application up and running
on my development box.

This is what I am trying:
D:\project>rake db:create
(in D:/project)
rake aborted!
can’t activate rails (= 2.2.2), already activated rails-2.2.0]

I have rails 2.2.2 installed. Also the rails is localized in code, so
not sure why it is trying to load rails-2.2.2.

Anyone has any idea?