Table Result: 1NTx-7 N/S EW+1700
SB stopped off en route to Reno at the appropriately named Ten Sleep in Wyoming, where there was a 5-table Monday morning game with tea and cakes for only $5. He noticed the sign "Strictly No Psyches" on the wall as he came in, but also saw another sign that "Games are played in accordance with ACBL laws". All the players seemed in their nineties, and he played with the host, not the sharpest pencil in the box, and he trundled along at around 55% until the last board when he decided some excitement was in order to wake up the place.
West could do little other than double, and SB decided to gamble that EW could make a slam, when -1400 would be ok. He was right about that, and when the traveler was opened, West, a sweet lady called Gloria, said "It's a complete bottom partner, all the other four pairs bid and made grand slam". "That was a takeout double and you should have taken it out". East, a lady called Alice, replied: "I thought of bidding my hearts, but I think that double is penalties, Gloria. You should have bid 7S or 7NT which makes." "And I think we need the director," she continued. "South has psyched and that is not allowed in this club."
The TD came and seemed to be agreeing with Alice and Gloria, but SB quickly quoted Law 40A3 to the TD: "A player may make any call or play without prior announcement provided that such call or play is not based on an undisclosed partnership understanding (see Law 40C1)." "It is clear that there was no undisclosed understanding", he continued. "But we do have a "no-psyches" rule", replied the elderly TD, "and also your partner should have alerted the unusual no-trump, which we do allow". "That was not the unusual NT, you cretin", replied SB. "It was an out-and-out psyche, which you are not allowed to prohibit."
How would you rule?