NoMethodError: undefined method `path' for #

Hi I am trying to setup rails application in my local machine, the rails application developed using rails 3.0.1 and ruby 1.8.7 when am trying to run bundle install command ./bundle exec bundle install am getting the following error

NoMethodError: undefined method `path' for #<Bundler::Source::Rubygems:0x7f7af5a6d818>

can any one help me to sort out this issue please.