Spare the Rod or spoil the Kid

This phrase has been circling in my mind for months... Little Celest has been getting out of hand recently..refusing to follow instruction and likes to act on her own. Esp when she is showing disrespect to the elderly. We scolded her and send her to timeout corner but nothing works!.. cos grandma always cover for her, allowing her to continue her rude behavior...Little Celest really knows who she can run to should she made any mistake..Sighz... Grandma dotes her too much and it has made her into a terrible monster...