He contended that the agency favoured Tata which had given Rs 20 crore as donation to Raja for building a hospital in the DMK leaser's constituency.
Balwa, who is accused along with 16 others in the case, claimed that he cannot be prosecuted for pushing back Tata in the race as the firm was never in the race to get the 2G spectrum licence.
"The investigating officer in the case had favoured Tata and by prosecuting Balwa, he had tried to deflect the wrong doings of Tata," advocate Vijay Aggarwal, appearing for Balwa, argued before Special Judge O P Saini.
Advancing final arguments in the case, the advocate said Raja had admitted in his cross-examination that he had taken Rs 20 crore donation from Tata for the hospital in his constituency.
"So, Balwa cannot be prosecuted for the alleged conspiracy with Raja for pushing back Tata in the race to get licences," the counsel said, adding that "it had come on record that Niira Radia was visiting Raja's residence with Ratan Tata".
Radia, who is a prosecution witness in the case, was managing, through her company, the corporate communication of Tata Group.
He further claimed that the Supreme Court has also ordered to find out whether Tata was eligible to get the 2G spectrum licence.
"It's wrong to prosecute Balwa for pushing back Tata in the race as Tata was never in the race," the counsel said.
Earlier, Balwa had told the court that prosecution's case was contradictory and there was nothing to prove conspiracy charge against him.
He had also claimed that he was being prosecuted wrongly and there was shift in the stand of CBI in the case.
Meanwhile, responding to the allegations, a Tata Sons spokesperson has refuted the claims made in the court.
"The allegations are completely baseless. The MLA of Perambalur had made a request in 2008 to the Tata Trusts for a grant to support some components for a medical college-cum-hospital, the proposal of which was announced in the state Assembly of Tamil Nadu. On assessing the appeal, the Trusts had imposed some conditionalities, related to the project, modalities of operations etc. Since these conditionalities were not met, the Tata Trusts did not make any grant at all.
This had no connection whatsoever with Tata Teleservices application for spectrum. As for spectrum, as is well known, it was Tata which was the victim, having been denied what was due to it including spectrum for Delhi, " the statement released by the group said.
Besides Raja and Balwa, DMK MP Kanimozhi, former Telecom Secretary Siddharth Behura, Raja's erstwhile private secretary R K Chandolia, Unitech Ltd Managing Director Sanjay Chandra, STPL promoter Vinod Goenka and three executives of Reliance ADAG - Gautam Doshi, Surendra Pipara and Hari Nair - are facing trial in the case.
Directors of Kusegaon Fruits and Vegetables Pvt Ltd Asif Balwa and Rajiv Agarwal, Kalaignar TV Director Sharad Kumar and Bollywood producer Karim Morani are also facing trial in the case, besides three telecom companies -- Reliance Telecom Ltd, STPL and Unitech Wireless (Tamil Nadu) Ltd.
In its charge sheet, CBI had alleged a loss of Rs 30,984 crore to the exchequer in allocation of 122 licences for 2G spectrum which was scrapped by the Supreme Court on February 2, 2012.
All these accused, who are out on bail, have denied the allegations levelled against them by CBI.