how can we yield inside a code block in ruby?

The code you have there does in fact not work, because there is no block to yield to.

You will get a LocalJumpError, which gets swallowed by the catch-all rescue, and thus it will look like there is a problem with the file, when in fact, there is actually a programming error. (Teachable moment: never ever do a blanket catch-all rescue, always rescue only exactly those exceptions you want to handle.)