You don't need to output php
tags:
<?php
if ( has_post_thumbnail() )
{
echo '<div class="gridly-image"><a href="'. the_permalink() .'">'. the_post_thumbnail('summary-image', array('class' => 'overlay', 'title'=> the_title('Read Article ',' now',false) )) .'</a></div>';
}
echo '<div class="date">
<span class="day">'. the_time('d') .'</span>
<div class="holder">
<span class="month">'. the_time('M') .'</span>
<span class="year">'. the_time('Y') .'</span>
</div>
</div>';
?>