Concept:
When a conductor of length $l$ moves with velocity $v$ perpendicular to a magnetic field $B$, the motional emf induced is:
\[
\mathcal{E} = B l v
\]
For a body falling freely from rest under gravity, the velocity after falling through a distance $x$ is obtained using kinematics.
Step 1:
Since the rod starts from rest and falls freely under gravity,
\[
v^2 = u^2 + 2gx
\]
Here $u = 0$, so
\[
v = \sqrt{2gx}
\]
Step 2:
The rod is falling vertically while the magnetic field is horizontal, hence the velocity is perpendicular to the magnetic field.
Therefore, the induced emf is:
\[
\mathcal{E} = B l v
\]
Step 3:
Substitute the value of $v$:
\[
\mathcal{E} = B l \sqrt{2gx}
\]
Since $l$ is constant and absorbed in the given options, the emf varies as:
\[
\boxed{\mathcal{E} = B\sqrt{2gx}}
\]