Thanks for all your replies friendz but nothing worked. I tried other alternative and that helped.
1. db2 " restore database xyz (skip into part) redirect generate script scriptname.clp without rolling forward"
2. modified the database name into which restored needs to be done in the script and that way it worked but it was not ready to take "INTO DBNAME' in the command itself.
I had the same problem. In my case, there was an existing database with the same name in the machine (another version of the database)
The only way to solve the problem was to drop the old database.
But I have to admit that it is very weird, because you could probably want to create a second database based on the first one.