Can't generate a migration on existing project - ruby-on-rails

Question

I have forked an existing rails project and have run the following:
bundle install
rake db:setup
rails server
The application is up and running, however when I have to add a migration as follows:
rails generate migration CreateCategories
I get the following error:
Usage:
rails new APP_PATH [options]
Options:
-r, [--ruby=PATH] # Path to the Ruby binary of your choice
# Default: /home/mhmd/.rvm/rubies/ruby-2.2.1/bin/ruby
-m, [--template=TEMPLATE] # Path to some application template (can be a filesystem path or URL)
[--skip-gemfile], [--no-skip-gemfile] # Don't create a Gemfile
-B, [--skip-bundle], [--no-skip-bundle] # Don't run bundle install
-G, [--skip-git], [--no-skip-git] # Skip .gitignore file
[--skip-keeps], [--no-skip-keeps] # Skip source control .keep files
-O, [--skip-active-record], [--no-skip-active-record] # Skip Active Record files
-S, [--skip-sprockets], [--no-skip-sprockets] # Skip Sprockets files
[--skip-spring], [--no-skip-spring] # Don't install Spring application preloader
-d, [--database=DATABASE] # Preconfigure for selected database (options: mysql/oracle/postgresql/sqli
te3/frontbase/ibm_db/sqlserver/jdbcmysql/jdbcsqlite3/jdbcpostgresql/jdbc)
# Default: sqlite3
-j, [--javascript=JAVASCRIPT] # Preconfigure for selected JavaScript library
# Default: jquery
-J, [--skip-javascript], [--no-skip-javascript] # Skip JavaScript files
[--dev], [--no-dev] # Setup the application with Gemfile pointing to your Rails checkout
[--edge], [--no-edge] # Setup the application with Gemfile pointing to Rails repository
[--skip-turbolinks], [--no-skip-turbolinks] # Skip turbolinks gem
-T, [--skip-test-unit], [--no-skip-test-unit] # Skip Test::Unit files
[--rc=RC] # Path to file containing extra configuration options for rails command
[--no-rc], [--no-no-rc] # Skip loading of extra configuration options from .railsrc file
Runtime options:
-f, [--force] # Overwrite files that already exist
-p, [--pretend], [--no-pretend] # Run but do not make any changes
-q, [--quiet], [--no-quiet] # Suppress status output
-s, [--skip], [--no-skip] # Skip files that already exist
Rails options:
-h, [--help], [--no-help] # Show this help message and quit
-v, [--version], [--no-version] # Show Rails version number and quit
Description:
The 'rails new' command creates a new Rails application with a default
directory structure and configuration at the path you specify.
You can specify extra command-line arguments to be used every time
'rails new' runs in the .railsrc configuration file in your home directory.
Note that the arguments specified in the .railsrc file don't affect the
defaults values shown above in this help message.
Example:
rails new ~/Code/Ruby/weblog
This generates a skeletal Rails installation in ~/Code/Ruby/weblog.
See the README in the newly created application to get going.
That is, it says that I have to create an application first. Isn't it possible to generate a migration in an existing project?
Note: I get this only when I'm modifying an existing project, when I create a new project it works fine.
Rails version: 4.2.3
ruby version: 2.2.1p85
using ubuntu 14.04