rails s
command creating new project inside project directory instead of starting server.
I installed rails in my system but it is showing unexpected behavior, as creating project instead of starting server.
I see in my system by running gem list | grep rails command it shows rails 3.2.11 but when I see using rails -v then it shows rails 2.3.11
SO on running rails s it picks rails 2
Thanks @Gosavi and @boulder
Your solutions are also worthy, but my prbolem was resolved doing this
My app was poiniting to default gemset so I created new gemset for my app
To create new gemset
To list avaliable gemsets: